Construction spending weak, ISM strong
There's more economic data than you can shake a stick at today. So forgive me for being a bit behind in updating.
Besides pending home sales, we learned that construction spending dropped 0.2% in July. That missed expectations for a flat reading; moreover, June's number was revised down to +0.1% from +0.3%. Private residential spending rose 2.3%, but private nonresidential spending dropped 1.2%. This fits with other evidence that residential real estate is stabilizing, while commercial isn't.
The ISM Manufacturing index, on the other hand, topped forecasts. It came in at 52.9 in August compared with 48.9 in July and expectations for a reading of 50.5. The new orders subindex vaulted to 64.9 from 55.3, while the production subindex climbed to 61.9 from 57.9. The prices paid indicator of inflation also came in hot -- at 65 vs. 55 a month earlier. The employment index inched up to 46.4 from 45.6.
Net/net, the market index is a bit of a rise in stocks and a sharp drop in bonds. Long bond futures were recently down 28/32, in fact.
Besides pending home sales, we learned that construction spending dropped 0.2% in July. That missed expectations for a flat reading; moreover, June's number was revised down to +0.1% from +0.3%. Private residential spending rose 2.3%, but private nonresidential spending dropped 1.2%. This fits with other evidence that residential real estate is stabilizing, while commercial isn't.
The ISM Manufacturing index, on the other hand, topped forecasts. It came in at 52.9 in August compared with 48.9 in July and expectations for a reading of 50.5. The new orders subindex vaulted to 64.9 from 55.3, while the production subindex climbed to 61.9 from 57.9. The prices paid indicator of inflation also came in hot -- at 65 vs. 55 a month earlier. The employment index inched up to 46.4 from 45.6.
Net/net, the market index is a bit of a rise in stocks and a sharp drop in bonds. Long bond futures were recently down 28/32, in fact.
posted by Mike Larson at
10:28 AM
2 Comments:
Thanks for such an informative article.It's true that construction spending is weak and it is going to get weaker day by day.But i don’t think so that the home construction has fallen by any percentage.At least the market for new homes isn’t getting worse anymore, and that’s the first step to getting better.
Construction of single-family homes rose in July for the fifth straight month, edging up almost 2 percent to the highest level since October. Building permits climbed nearly 6 percent.
Each new home built creates about three jobs on average and generates about $90,000 in taxes paid to local and federal authorities, according to the National Association of Home Builders.
With new construction up 37 percent from its low point this winter, the industry is expected to help the overall economy this quarter for the first time in 31/2 years.
Thanks,
Portable Storage,
http://www.moveablecubicle.com
By
Portable Storage, at September 3, 2009 at 4:32 PM
Thank you for your great article on this is very important subject.Very informative and easy read.Yes i agree that construction spending is weak and it is going to get weaker day by day.The construction rates has been fallen due to recession.The construction spending dropped 0.2% in July which directly affected Economic Development.Hope so i will get the futhur updates in future.
Thanks,
Storage Containers,
www.boxtcontainers.com
By
Storage Containers, at October 6, 2009 at 3:00 AM
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