- ISM Manufacturing for March rose to 48.6 versus estimates of 47.5 and a reading of 48.3 in February.
- ISM Prices Paid for March rose to 83.5 versus estimates of 75.0 and a reading of 75.5 in February.
- Construction Spending for March fell -.3% versus estimates of a -1.0% decline and an upwardly revised -1.0% decline in February.
BOTTOM LINE: Manufacturing in the US beat analysts’ estimates last month, easing concern over the possibility of a deepening economic slump, Bloomberg reported. The New Orders component of the index fell to 46.5, while the Exports component rose to 56.5 versus 56.0 in February. The Inventory component fell to 44.9 versus 45.4 the prior month. The Orders Backlog component rose to 47.5 versus 45.0 in February. The Employment component rose to 49.2 versus 46.0 the prior month. While US growth likely turned mildly negative during 1Q, I continue to believe the US will avoid recession as growth accelerates back into positive territory this quarter on inventory rebuilding, fiscal/monetary stimuli, a likely end to the American Axle strike, booming exports and lower energy prices.
Spending on US building projects fell in February less than analysts anticipated, Bloomberg reported. Private Residential construction spending fell .9% versus a 1.9% drop the prior month. Non-Residential construction rose .1% versus a .8% decline the prior month. Building of factories jumped 2.7%. Construction spending will continue to remain muted over the intermediate-term as home builders work down inventories and commercial building slows. The 10-year yield is jumping 13 basis points and the US Dollar Index is surging 1.01% on today’s data. Moreover, the odds the Fed lowers the benchmark fed funds rate by 50 basis points at the upcoming April 30th meeting are falling to 30.0% from 52.0% yesterday. The odds of a 25 basis point cut are rising to 70.0% from 48.0% yesterday.
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