Monday, May 11, 2009

Economic Update

On Monday, May 4, the Commerce Department reported total construction spending increased 0.3% in March. It was the best result since September 2008, and ended five months of consecutive decline. Economists had expected spending to drop 1.5%.

The National Association of Realtors reported that its pending home sales index, an important forward-looking indicator based on signed contracts, rose 3.2% to 84.6 in March from 82 in February. It was the second consecutive monthly increase after the index hit a record low in January. The reading is 1.1% above the March 2008 level.

According to the ICSC-Goldman Sachs index, retail sales rose 0.7% in the week ending May 2. On a year-over-year basis, retailers saw sales decline by 0.8%.

The Institute for Supply Management reported the monthly index of non-manufacturing activity rose in April to 43.7% from 40.8% in March. Economists had expected a reading of 42%. Figures below 50% indicate contraction, making April the seventh straight monthly decline in the index.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications for the week ending May 1 increased 2% to 979.7 from the previous week. Purchase volume rose 5% to 264.3, while refinancing applications jumped 1.2% to 5,169.3.

The Labor Department said initial claims for unemployment benefits unexpectedly dropped by 34,000 to 601,000 for the week ending May 2. However, the number of people continuing to claim jobless benefits increased by 56,000 to 6.351 million.

According to the Federal Reserve, consumer debt fell 5.2% in March to $11.1 billion. Economists had forecast consumer debt would drop $3.5 billion. Total consumer credit debt in March was $2.55 trillion.

Upcoming on the economic calendar are reports on retail sales on May 13, producer price index on May 14 and industrial production on May 15.


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