Friday, July 07, 2006

Swing and a miss 

That report two days ago of ADP's payroll projections was off by more than a little bit. Payrolls rose by 121,000, which would be at the lower end of most expectations, and below my lower end. I still like 3% for GDP growth for the second quarter, but it's going to be just that and not much more. The Fed funds futures had the odds of another rate increase in August up over 60% Weds., but down yesterday and I'd guess so again today.

Two things to note that I see on a quick read: Construction employment has just stopped growing over the last four months. The softness in the housing market is making itself felt. Also, retail trade is not growing either. Those of us in St. Cloud know those two sectors were major contributors to the economy over the last two years. This report does not bode well for the local (central MN) economy.