US sees its third piece of good jobs data today, is taper back on?

The US has seen three strong items of employment data today, as our final of the three is a strong beat.

The last - in the form of the employment sub-index of the ISM non-manufacturing purchasing manager's index (PMI) - shows that employment is expanding faster in June, with a figure of 54.7 versus 50.1 previous.

We've already seen positive numbers from ADP and initial jobless claims. Now we have to wait for Friday's nonfarm payrolls to finish the week of US employment data.

ISM non-manufacturing PMI as a whole was disappointing, falling from 53.7 to 52.2, despite economists forecasting a rise to 54.0.

Amna Asaf, economist at Capital Economics:

The decline in the US ISM non-manufacturing index to a three-year low of 52.2 in June, from 53.7 in May, provides further evidence that the economy has lost some momentum. The fall was led by sharp declines in the new orders index (from 56.0 to 50.8) and the business activity index (from 56.5 to 51.7).

When taken together with the ISM manufacturing index, which rose in June, the two surveys are consistent with annualised GDP growth of around 1%. The one positive development was the increase in the employment index to 54.7, from 50.1 May.

That’s consistent with an improvement in private services payroll growth from 179,000 in May to over 200,000 in June and supports the upbeat message from today’s ADP report. Taken together, these two surveys suggest that the risk to our forecast that payrolls rose by around 150,000 in June (data due on Friday) now lie on the upside.