- Chicago Purchasing Manager for May fell to 54.1 versus estimates of 61.4 and a reading of 65.6 in April.
BOTTOM LINE: US consumer sentiment unexpectedly rose in May for the first time in four months. Rising stock prices, a booming housing market, lower long-term interest rates, lower gas prices and an improving labor market boosted confidence. The present situation component of the index rose to 116.7 from 113.8. The % of consumers who saw jobs as plentiful rose to 22.6% from 20.4% in April. The percentage expecting more jobs to be available six months from now increased to 14.9% from 14.0%. Those expecting fewer jobs fell to 15.9% from 18.4%. The percentage expecting to buy a home in the next six months dropped to 3.5% from 4.1%. However, those expecting to purchase an auto increased to 7.6% from 5.8%. Confidence in New England experienced the greatest regional gain, rising 24.2% to 92.40 from 74.40. We have likely seen the lows in sentiment for the year.
The Chicago PMI fell in May to the lowest level in almost two years. The employment component of the index fell to 54.7 from 62.3, while the new orders index declined to 57.9 from 71.0. On the positive side, the prices paid component fell to 54.3 from 66.1. The prices paid index has now plunged by 38.9% since November 30, 2004. I expect the ISM Manufacturing Index to fall below expectations tomorrow, as well.
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