Stocks opened the month of June with a bang thanks to a strong jobs report. The Dow gained 219 points to close at 24,653. Trading volume was higher. For the week the Dow was down about 0.6% but managed to stage a bullish reversal.
The labor report for May was hot. New jobs were expected to be around 180k but the actual number was 223,000 and the unemployment rate dropped to 3.8% which is an 18 year low. Retail, manufacturing and construction jobs were up more than expected despite nasty weather in parts of the country. Wage growth was tepid but as James Cramer on CNBC said “jobs are bountiful”.
The Random Lengths Lumber price index hit a new high rising from $568 to $578. Prices continue to rise even though buyers are starting to back off amid signs of shock at the unprecedented rise in prices. Trucking shortages continue to affect the markets and rail transportation issues in Canada remain a concern. The National Association of Home Builders said that builder confidence remains high and the average size of a new single family home has increased 10% in 2018.
Costco reported a 12% revenue gain and a 21% increase in net income. Same store sales were up 10.2% beating estimates calling for an increase of 8%. Gasoline sales were strong especially in Bellingham where Canadians are flocking to tank up with gas that is half what it costs north of the boarder. Online sales were up 37%. Costco announced an increase in wages saying it will pass tax cut savings to employees by boosting pay by roughly 4% which will benefit about 130,000 workers effective June 11th. Way to go Costco!