- ISM Manufacturing for June rose to 50.2 versus estimates of 48.5 and a reading of 49.6 in May.
- ISM Prices Paid for June rose to 91.5 versus estimates of 87.0 and a reading of 87.0 in May.
- Construction spending for May fell .4% versus estimates of a .6% decline and an upwardly revised .1% decline in April.
BOTTOM LINE: Manufacturing in the US unexpectedly expanded in June for the first time in five months, signaling tax rebate checks are helping companies weather the housing slump and rise in commodities, Bloomberg reported. The Export component of the index fell to 58.5 from 59.5 in May. The New Orders component fell to 49.6 from 49.7 the prior month. The Orders Backlog component rose to 47.5 from 46.0 in May. The Inventory component rose to 51.12 from 48.0 in May. The Employment component fell to 43.7 versus 45.5 in May. I expect the ISM Manufacturing Index to come in above 50.0, showing expansion, again this month.
Spending on US construction projects fell less than forecast in May as work on hotels, power plants and public hospitals helped cushion the slowdown in homebuilding, Bloomberg reported. Private residential projects fell 1.6% in May, the 25th drop in the past 26 months, versus a 1.7% decline in April. Private non-residential construction rose .2%, reaching a record $405.3 billion and a fifth straight month of growth. Public projects also rose to an all-time high, climbing .4% in May. I still expect construction spending to remain muted over the intermediate-term as homebuilders work down inventories and commercial building slows. Weekly retail sales rose 2.5% this week versus 2.4% the prior week. This is the best weekly gain since the week of Oct. 16, 2007 and up from a .5% increase the week of March 4th. This is a large positive, considering the consumer headwinds. The US Dollar Index is .29% lower and the 10-year yield is falling 3 basis points to 3.94% on today’s reports. The TED spread is dropping 12.2% to .92, which is down 18 basis points in 3 days.
No comments:
Post a Comment