Amid Slowing Economy, Jobs Report Awaited

The question for this week: Will the June employment report out Friday show a big rebound from the surprisingly weak May numbers, or will it provide further evidence that the economy has shifted into a lower gear? The unemployment rate stood at 4.1% in May. As expected, the Federal Reserve made no change last week in its target for overnight rates, and that led to a powerful rally in bonds. Yields on 30-year bonds fell below 6%, and those on two-year notes, at 6.38%, were just about where they were at the beginning of the year. The evidence of slowing growth has helped the market enormously, but everyone realizes that it is numbers such as those coming Friday that will determine whether the Fed remains on hold in coming months or raises rates again. (Washington Post)

Other economic reports due this week:

* The National Assn. of Purchasing Management’s factory index for June, due today, could show that higher borrowing costs might be cooling the economy’s industrial sector. In May, the index came in at 53.2. Even though the June index is expected to be above 50, which still indicates expansion, a drop from May’s number would mark the fourth straight decline and be the lowest reading since April 1999.

* The Commerce Department will report today construction spending figures for May. They fell 0.6% in April.

* The Commerce Department on Wednesday will report May figures on factory orders. In April, orders dropped 4.3%, that’s the steepest drop in nearly a decade.

* The Conference Board on Wednesday will release its monthly index of leading economic indicators for May. The index--considered a gauge of economic performance for the next six months--fell 0.1% in April.