Chicago PMI

Came in at read of 64.1, against the estimate of 60.0, resulting in more firms expressing a willingness to add to their workforce.  The red flag comes in the form of the prices paid indicator which climbed to its highest level since May 2011.

Two special questions offered useful incite to key economic questions of the moment.

Salaries

Has your firm increased starting salaries to attract and secure prospective employees?

• 61.4% - Yes
• 38.6% - No

Trade Talks

Impact on short-term purchasing decisions?

• 23.5% significant
• 39.2% Yes, but minimal
• 17.7% immune
• 19.6% unsure

Overall this is a very bullish report that underscores the tentative nature of business with respect to the so-called trade war which hasn’t derailed manufacturing plans or employment. 

University of Michigan Consumer Sentiment

The final reading for June was 98.2 (consensus 99.0), down from the preliminary reading of 99.3.  This is slightly better than May’s reading of 98.0.    

• The Current Economic Conditions Index was 116.5, down from the preliminary reading of 117.9., but ahead of the final reading for May of 111.8.
• The Index of Consumer Expectations was 86.3, down from the preliminary reading of 87.4, and lower than the final reading for May of 89.1.

As we have mentioned in the past, once the confusion clears up, the pent-up demand will be released back into the economy and our economic expansion will continue to chug along.  Let’s hope this happens sooner than later as we believe it will.

Speaking of chugging along, Greenbrier (GBX), a company that designs, manufactures, and markets railroad freight car equipment, is having a stellar day after reporting EPS that beat estimates by 0.15.  Helping the Dow Transportation Index to pull into the leadership road as it trades higher by 1.05%.