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• Durable goods orders excluding defense rose 15.5% MoM in May, matching estimates and confirming a sharp rebound driven by civilian aircraft and high-value capital equipment orders, reflecting strong investment demand in non-defense sectors.
• Durable goods orders excluding transportation increased 0.5% MoM, in line with expectations and signaling steady core capital goods activity, which better captures underlying business investment trends outside the volatile aircraft and auto sectors.

Analysts note the robust growth in orders excluding defense underscores solid private sector capital spending momentum, while the stable ex-transportation reading points to continued resilience in core manufacturing despite tighter credit and softer macroeconomic conditions.

• The S&P Global U.S. Composite PMI rose slightly to 52.9 in June, matching expectations of 52.8 and ticking up from May’s 52.8, indicating continued moderate growth across the private sector, with services leading the expansion.
• The S&P Global U.S. Services PMI came in at 52.9, just below the estimate and May’s 53.1, signaling steady, solid expansion in the services sector, which accounts for more than two-thirds of U.S. economic activity.

The data reflect healthy demand conditions, particularly in business services and consumer spending, though survey respondents noted ongoing cost pressures and signs of slower new order growth, especially in discretionary categories.

Analysts emphasize that with both indices comfortably above the 50 thresholds, the U.S. private sector remains firmly in growth territory, supporting expectations for a soft-landing scenario — but caution that stubborn inflation and tighter credit could still pose risks in the second half of 2025.

• The U.S. trade deficit widened to -$71.5 billion in May, worse than expectations of -$69.9B and sharply higher than April’s -$60.3B, marking the largest trade gap since October 2022.
• Exports fell to $279.0 billion, down from April’s $289.4B, reflecting weaker overseas demand for U.S. goods and services, including declines in industrial supplies, capital goods, and autos.
• Imports edged slightly lower to $350.5 billion, from April’s $351.0B, as purchases of consumer goods and food slowed modestly, but the drop in exports drove the wider deficit.

Analysts note that the sharp deterioration in the trade balance is likely to weigh on Q2 GDP growth, with net exports turning into a drag after supporting economic activity in recent quarters. The data highlight lingering global demand challenges and could add pressure for policymakers to consider measures supporting U.S. competitiveness abroad.

• Nonfarm payrolls rose by 147,000 in June, above expectations of 111K and up from May’s revised 144K, indicating resilient but slowing job growth.
• Private payrolls added just 74,000 jobs, well below the 105K estimate and down from 137K in May, with manufacturing employment falling by 7,000, highlighting persistent weakness in industrial hiring.
• Government payrolls increased by 73,000, sharply higher than May’s 7,000, which helped lift the overall headline number.
• The unemployment rate eased to 4.1%, down from May’s 4.2% and better than the 4.3% consensus estimate, marking an unexpected improvement and suggesting some resilience in the labor market despite signs of cooling.
• The broader U6 underemployment rate edged down to 7.7% from 7.8%, reflecting mixed signals about slack in the labor market.
• Average hourly earnings rose 0.2% MoM, softer than the 0.3% estimate and down from 0.4% in May, with annual wage growth slowing to 3.7% YoY, indicating waning wage pressures.
• Average weekly hours dipped to 34.2, from 34.3, while the participation rate slipped to 62.3%, hinting at softness in labor force engagement.

Analysts note the June report shows a labor market that remains strong enough to support consumers, but with clear signs of cooling momentum, reinforcing expectations for possible Federal Reserve rate cuts if disinflation continues.

• Initial jobless claims fell to 233,000 last week, below expectations of 240K and down from the prior week’s 237K, reflecting steady labor market conditions despite signs of cooling elsewhere in the economy.
• Continuing jobless claims held at 1.964 million, matching the previous week’s level and near expectations of 1.960 million, indicating little change in the pace at which unemployed workers are finding new jobs.
• The 4-week average of initial claims eased to 241,500 from 245,250, smoothing out weekly volatility and underscoring gradual stability in layoffs.

Analysts note that while claims remain historically low, persistent high interest rates and slowing job creation in some sectors could gradually lift claims levels later this year, especially if broader economic growth softens further.

The ADP Nonfarm Employment Change report showed a loss of 33,000 private-sector jobs in June, a massive downside surprise compared to expectations of a 99K gain and down sharply from May’s revised 29K increase — marking the first negative print since early 2021.

The unexpected decline suggests a sharp deterioration in hiring momentum, with the most notable job losses concentrated in construction, manufacturing, and small businesses — sectors particularly sensitive to high interest rates and tighter credit conditions.

Analysts warn that if confirmed by Friday’s official payrolls report, the ADP miss could signal cracks emerging in the labor market, raising concerns about a potential slowdown in consumer spending and increasing pressure on the Federal Reserve to consider rate cuts sooner than anticipated.

• Challenger job cuts totaled 47,999 in June, down sharply from May’s 93,816, marking the lowest monthly total since December 2023 and signaling reduced layoff activity across corporate America.
• On a year-over-year basis, job cuts fell 1.6%, a significant improvement from the 47% YoY surge recorded in May, indicating that employers are becoming more cautious about cutting staff despite economic headwinds.

The decline in layoffs suggests ongoing resilience in the U.S. labor market, with many companies opting to retain workers as they anticipate potential stabilization in demand and aim to avoid rehiring costs. However, analysts caution that persistent uncertainties — including inflation, high interest rates, and geopolitical tensions — could still weigh on hiring plans in the coming months.

• The MBA 30-year fixed mortgage rate fell to 6.79%, down from 6.88% the previous week, marking the lowest level since early May as bond yields eased amid shifting Federal Reserve expectations.
• MBA mortgage applications surged 2.7% WoW, accelerating from the prior week’s 1.1% gain, driven by a rebound in both purchase and refinance activity.
• The MBA Purchase Index edged up to 165.3 from 165.2, indicating steady demand for home buying despite elevated borrowing costs.
• The Mortgage Market Index, a measure of total application volume, rose to 257.5, from 250.8 previously, reflecting broad-based strength across the mortgage market.
• The Mortgage Refinance Index climbed to 759.7, up sharply from 713.4, as lower rates prompted more homeowners to refinance existing loans.

Analysts note that the dip in rates has revived some mortgage demand, but overall activity remains well below pre-2022 levels, as affordability constraints and high home prices continue to limit buyers’ options.

The Atlanta Fed’s GDPNow model lowered its estimate for U.S. Q2 GDP growth to 2.5%, down from 2.9% previously, reflecting softer-than-expected recent data on construction spending, manufacturing activity, and consumer indicators.

The downward revision highlights mounting signs of a gradual cooling in economic momentum, as high borrowing costs and slowing job growth weigh on business investment and household spending. Despite this, the GDPNow reading still points to moderate growth, avoiding fears of an imminent recession.

Analysts caution that while the estimate suggests the economy continues to expand, risks are tilted to the downside, and the trajectory of inflation and Federal Reserve policy will remain critical for second-half 2025 growth prospects.

The JOLTS job openings report showed 7.769 million positions available in May, sharply above expectations of 7.320 million and up from April’s revised 7.395 million — marking the highest level since February and signaling continued tightness in the U.S. labor market.

The unexpected rise suggests that demand for workers remains strong despite signs of cooling in other parts of the economy, reinforcing concerns that wage pressures could stay elevated and complicate the Federal Reserve’s efforts to bring inflation sustainably back to target.

Analysts caution that while the jump in openings supports near-term consumer spending, it also raises the risk of persistent labor market imbalances, which could delay expected rate cuts if inflationary pressures remain sticky.

• The ISM Manufacturing PMI rose to 49.0 in June, slightly above expectations of 48.8 and up from 48.5 in May, signaling a slower pace of contraction in the manufacturing sector but marking the third straight month below 50.
• The New Orders Index fell to 46.4, down from May’s 47.6, pointing to shrinking demand for manufactured goods as elevated borrowing costs and cautious business spending weigh on new business activity.
• The Employment Index dropped to 45.0, from 46.8 in May, indicating deeper job losses in the factory sector — the lowest reading since mid-2020.
• The Prices Index rose slightly to 69.7, up from 69.4 in May, reflecting persistent cost pressures, especially in raw materials and commodities.

Overall, the ISM data highlight a mixed picture for U.S. manufacturing: while the headline PMI suggests tentative stabilization, declining new orders and employment point to continued challenges ahead, even as inflationary pressures remain stubborn.

Construction spending in the U.S. declined 0.3% MoM in May, worse than expectations of a 0.2% drop and matching April’s -0.2% decline, signaling continued softness in construction activity amid elevated borrowing costs and cautious investment.

The second straight monthly decrease reflects weakness in both residential and nonresidential sectors, as high mortgage rates and tighter financing conditions weigh on builders and developers. Analysts note that while public construction spending has offered some support, private sector activity remains fragile, limiting momentum in overall construction output.

The data highlight how stubbornly high interest rates continue to restrain the housing and commercial real estate sectors, potentially dragging on broader economic growth in the second half of 2025.