Economy

Economic Data Roundup (05/16/2016)

5/16/16 12:00 PM

iStock_000009946822_Small.jpgThere were two important reports on the U.S. economy released this morning. First, data from the Federal Reserve Bank of New York showed that manufacturing activity in the Northeast region of the country weakened considerably this month, with the general business conditions index plunging to -9.02 in May. This is significantly worse than the +7.00 print economists had expected and the first negative (contractionary) reading since February. Under the hood, total employment lifted but measures of new orders, shipments, inventories, prices received, and the average employee workweek all deteriorated in May. Surveyed managers were also found to be less optimistic about general business conditions over the next six months, and plans for capital expenditures and technology investment broadly decreased. Overall this was a disappointing report which suggests that the recent rebound in regional manufacturing activity across the country was short-lived.

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Elsewhere, a report from the National Association of Home Builders (NAHB) showed that builders’ confidence in the market for newly built, single-family homes was little changed this month. Specifically, the housing market index held at 58 in May, slightly worse than economists had predicted but still relatively close to the 10-year high hit in October of last year. Under the hood, gauges of current sales conditions and prospective buyer traffic were little changed this month but sales expectations for the next six months lifted. Regionally, builder sentiment improved over the past three months in the South and the Midwest, was unchanged in the West, and deteriorated in the Northeast. NAHB Chairman Ed Brady cautioned that “Builders are facing an increasing number of regulations and lot supply constraints,” but NAHB Chief Economist Robert Dietz stressed that “The fact that future sales expectations rose slightly this month shows that builders are confident that the market will continue to strengthen. Job creation, low mortgage interest rates and pent-up demand will also spur growth in the single-family housing sector moving forward.”

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Sources: Econoday, Bloomberg, Twitter, ZH, FRBNY, NAHB, FRBSL

Post author: Charles Couch