Bill Losey’s Weekly Economic Report for June 6, 2011

HIRING TAPERS OFF IN MAY
Wall Street braced itself Friday for a subpar jobs report, and that was what arrived. Non-farm payrolls grew by just 54,000 in May – and if McDonald’s hadn’t added 62,000 fast-food positions last month, net hiring would have been negative. Payrolls had expanded by an average of 220,000 positions a month in the previous three months of data. The unemployment rate ticked north to 9.1% in May; the percentage of people without a job for six months or longer rose to 45.1%, nearly a record.

ISM: SOME GOOD NEWS, SOME BAD NEWS
The Institute for Supply Management’s manufacturing sector index slipped a troubling 6.9% to 53.5 for May. However, ISM’s service sector PMI rose 1.8% in May to 54.6, and new orders increased by 4.1%. Expansion continues in both sectors.

YEAR-OVER-YEAR HOME PRICES RETREAT
The newly released March edition of the S&P/Case-Shiller Home Price Index found home prices across 20 metro areas down 3.6% from March 2010. Overall, prices were 33.1% below the index’s peak in July 2006 and at levels last seen during the middle of 2002.

CONFIDENCE FALTERS
The Conference Board Consumer Confidence Index came in at 60.8 for May, notably beneath the 66.0 reading for April. The poll’s Expectations Index decreased to 75.2 from April’s 83.2 reading.

A DOWNDRAFT ON WALL STREET
A major selloff last Wednesday contributed to the Dow extending its losing streak to five weeks. Here was how it went during the four market days from May 31-June 3: DJIA, -2.33% to 12,151.26; S&P 500, -2.32% to 1,300.16; NASDAQ, -2.29% to 2,732.78. The Dow has not had a five-week losing streak since July 2004.