There were two new reports on the U.S. economy released this morning. First, data from the National Association of Home Builders (NAHB) showed that surveyed builders this month were more confident in the market for newly built, single-family homes. Specifically, the NAHB’s housing market index registered 70.0 in May, better than expected and the 2nd-highest reading of the current economic expansion. Regionally, builder confidence firmed in the Northeast, the South, and the West this month and was unchanged in the Midwest. Under the hood, the gauges of current sales conditions, prospective buyer traffic, and sales outlooks six months from now all improved in May, and NAHB chairman Granger MacDonald added that “this report shows that builders’ optimism in the housing market is solidifying, even as they deal with higher building material costs and shortages of lots and labor.”
Elsewhere, a report from the Federal Reserve Bank of New York showed that manufacturing activity in the Northeast region of the country slowed considerably this month, with the general business conditions index falling from April’s +5.2 print to -1.0 in May. That was the third monthly decline in a row, significantly worse than expected, and the first negative (contractionary) reading since October. Under the hood, current measures of new orders, shipments, inventories, employment, and hours worked all deteriorated this month but surveyed managers’ overall level of optimism about the future remained elevated. Forward-looking gauges of sales and job creation also improved in May but reported plans to boost technology spending and capital expenditures over the next six months declined.
Sources: Econoday, ZH, NAHB, FRBNY, FRBSLPost author: Charles Couch