John J. Edwards III
This molasses is awfully watery.
Monday's release of the
National Association of Purchasing Management Index
was another indication that the slowing economy isn't quite so slow as Wall Streeters would like. The surprising rise to 57.1 in May from 54.2 in April sent the bond market into a brief tizzy, but it later recovered (at least at the long end). The yield on the bellwether 30-year Treasury bond eased to 6.90%.
Ken Mayland, chief economist at
in Cleveland, noted in a report that the new-orders component of the index was especially strong at 64.2, up from 57.9. Further, supplier delivery times lengthened, indicating a possible increase of price pressures. Mayland said that aspect of the report gets a lot of attention at the
as that august group gauges the inflation outlook.
"This report throws cold water on any 'low growth' view of the economy's remaining 1997 prospects," Mayland wrote. "That fact is that we are enjoying a very high-quality,
expansion in the economy. It's the kind of expansion that should continue to produce an abundance of above-average paying jobs."
Economists are generally looking ahead to the Friday report on
for the clearest view of the economy's strength. But every little bit will help, including the few items on Tuesday's agenda.
(all times EDT):
(10 a.m.): The April measure, attempting to look ahead six to nine months. The consensus median estimate calls for a flat figure, compared with a 0.1% increase in March.
Domestic auto and truck sales
(afternoon): May figures. For auto sales, the consensus calls for 6.9 million versus 6.6 million in April. For truck sales, the consensus calls for 6.0 million versus 5.8 million in April.
(2:30 p.m.): Announcement of three- and six-month bill auctions, with an unchanged $15.0 billion expected.
(2:55 p.m.): Retail sales report for the week ended Saturday.