Economy

Economic Data Roundup (05/29/2018)

5/29/18 12:00 PM

iStock-178365799.jpgThere are a few important reports on the U.S. economy worth mentioning this morning. First, manufacturing activity in the southern region of the country expanded at a faster pace in May, according to a new report from the Federal Reserve Bank of Dallas (FRBD). Specifically, the 11th Fed district’s general business activity index rose from 21.8 to 26.8 this month, significantly better than expected and the largest monthly gain since December. Under the hood, production, capacity utilization, business growth, shipments, total employment, and hours worked all improved this month, while measures of new orders, capital expenditures, and wages/benefits deteriorated. Forward-looking (six months ahead) activity gauges generally strengthened in May, although surveyed manufacturers’ complaints about tariffs and labor quality persisted.

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Elsewhere, the University of Michigan’s consumer sentiment index slid to 98.0 in May, a 4-month low but still well above pre-election levels. Similarly, The Conference Board’s consumer confidence index ended May at 128.0, a historically high reading but worse than expected and only a gain because the April figure was revised sharply lower. The weakness in both consumer surveys this month was largely due to a slight decrease in optimism about the prospects for near-term wage growth. Reported confidence in the broader labor market, though, remained elevated in May, including a new cycle high in the gap between surveyed Americans describing jobs as “plentiful” versus “hard to get.” As for inflation, consumers’ references in the University of Michigan survey to discounted prices for durable goods, vehicles, and homes fell to decade lows in May, and Surveys of Consumers chief economist Richard Curtin added that “coupled with higher interest rates, it is likely that the pace of growth in personal consumption will remain at about 2.6% during the year ahead.”

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Sources: Econoday, FRBD, UoM, Bloomberg, The Conference Board

Post author: Charles Couch