Manufacturing— Activity accelerated for the second straight month according to both the ISM and PMI Manufacturing indexes due largely to manufactures hustling to move goods ahead of threatened tariffs. This haste has led to long delays in supplier deliveries—which also provided a boost to June data—as businesses struggled to book transportation amid a trucking shortage.  Many companies were forced to pay premiums in order to keep shipments moving. Overall, interestingly, demand is exceeding available capacity in most modes of transportation by a significant amount, and economists expect the trend to continue through year-end.

Services— Activity across US services industries and other sectors also accelerated for the second consecutive month as demand strengthened heading into the summer months. Some companies, however, are struggling to meet this demand due to logistical problems and shortages of skilled workers in some industries. According to the ISM non-manufacturing index, of the 18 industries tracked, 17 booked growth, led by the mining and construction industries.

Employment— US employment posted strong results in June as nonfarm payrolls increased by a stronger than expected 213K in response to brisk economic growth and a robust of new entrants into the workforce year to date. Regarding new entrants, the aggregate US workforce has grown by an average of ~250K workers each month this year—the best six month stretch in two years. This movement has played a role in the unemployment rate increasing from 3.8% to 4.0% in June, while concurrently increasing the participation rate from 0.2% to 62.9%. Furthermore, the robust increase in people looking for work has reduced wage inflation pressures/concerns and has given the Fed some breathing room as it relates to monetary policy.