Pending Home Sales Fall, ISM Manufacturing Surges

- Pending Home Sales for March fell -4.9% versus estimates of a .1% increase and an upwardly revised 1.1% gain in February.
- ISM Manufacturing for April rose to 54.7 versus estimates of 51.0 and 50.9 in March.
- ISM Prices Paid for April rose to 73.0 versus estimates of 67.8 and a reading of 65.5 in March.

BOTTOM LINE: An index of pending sales of existing homes in the US unexpectedly fell in March, Bloomberg reported. Pending re-sales declined 7.1% in the South, 6.9% in the Midwest and 4.9% in the Northeast. Sales rose 1.6% in the West. Residential construction fell at a 17% pace in the first quarter, subtracting 1 percentage point from overall US gdp growth. Low unemployment, record net worth and strong wage growth continue to give consumers’ the confidence to purchase houses at relatively high rates by historic standards. I continue to believe the worst of the housing downturn is past.

Manufacturing in the US grew in April at the fastest pace in almost a year as orders jumped and production improved, Bloomberg reported. The prices paid component rose to 73.0 from 65.5 the prior month. The New Orders component of the index jumped to 58.5, the highest since February 2006, from 51.6 the prior month. The Production component rose to 57.3 from 53.0 the prior month. The Inventory component fell to 46.3 versus 47.5 in March. I continue to believe manufacturing will begin adding to US growth this quarter after substantial inventory de-stocking pressured growth in 1Q.