The non-farm payrolls report is at the pinnacle of US economic data but employment is a lagging indicator. Businesses need to see months of softness before they pause hiring and even more before they begin layoffs.
The best way to capture creeping softness in demand is via surveys of business and the best of those is the ISM services survey, with the latest edition due at the top of the hour. This edition is particularly noteworthy because it follows the similar survey from S&P Global that showed a slowdown in services at 50.9 compared to 52.0 expected, including the first drop in new orders in six months.
We get the final update from S&P Global at 9:45 am ET, just 15 minutes before the ISM survey.
A drop in the ISM data closer to 50.0 would add to the dollar selling and risk appetite that followed the jobs report. However a firmer number and -- in particular -- hotter inflation pressures could unwind it.
