Saturday, 2 June 2007

Another day of upbeat economic data

Reuters reports the flood of data from the US, starting with the jobs report.

The number of new U.S. jobs climbed by an unexpectedly brisk 157,000 in May...

The jobs report showed the unemployment rate unchanged in May from April's 4.5 percent. The department revised its April figures to show that 80,000 jobs were created, instead of the 88,000 it reported a month ago...

Average hours of work rose slightly to 33.9 from 33.8 in April, though overtime hours fell slightly to 4.1 in May from 4.2 in April.

But US consumers don't even need income growth to increase spending.

The Commerce Department report showed consumer spending jumped 0.5 percent in April despite the fact that incomes fell 0.1 percent.

Core inflation remained tame.

... [C]ore consumer prices...rose a smaller-than-expected 0.1 percent in April... 2 percent on a year-over-year basis...

And there's more.

Most of the economic news was upbeat, including a Reuters/University of Michigan survey that showed consumers were keeping their spirits up despite soaring gasoline prices. Its final May reading on consumer sentiment gained to 88.3 from 87.1 at the end of April, showing optimism about the future.

Another report from the Institute for Supply Management said factory managers began restocking depleted inventories in May, which helped nudge its index of national factory activity up to 55.0 from 54.7 in April.

But...

One sour note came from the National Association of Realtors, which said its Pending Home Sales Index, based on contracts signed in April, dropped 3.2 percent to 101.4 from a revised 104.8 in March. It underlined the well-known woes facing the struggling housing sector.

On the other hand, auto sales steadied in May according to another Reuters report.

Not surprisingly, the manufacturing data in China also looked quite strong. Bloomberg reports:

China's manufacturing activity rose in May to the highest level in more than two years after a surge in bank lending, according to a survey by Hong Kong-based CLSA Asia Pacific Markets.

The Purchasing Managers' Index climbed to 54.1 from 53.3 in April, CLSA said today in an e-mailed statement. That is the highest since April 2005. A reading above 50 reflects an expansion in manufacturing...

A separate PMI, published earlier today by the National Bureau of Statistics and the China Federation of Logistics and Purchasing, fell to 55.7 in May, the lowest reading in three months, from a two-year high of 58.6 in April.

In the UK, manufacturing activity unexpectedly accelerated in May, reports Reuters, with possibly unwelcome implications for inflation.

The Chartered Institute of Purchasing and Supply/NTC purchasing managers' index rose to 54.9 last month from an upwardly revised 54.1 in April. Analysts polled by Reuters had expected a slight easing to 53.7...

The Bank of England is likely to be concerned to see the CIPS/NTC index measuring output price growth nudging higher to equal February's series high of 56.9...

Manufacturers may be raising prices in response to the return of a pick-up in the cost of raw materials. The CIPS/NTC index measuring input price growth hit its highest since September, up to 64.8 in May from 63.3 in April.

But in the euro area, manufacturing unexpectedly slowed, reports Bloomberg.

Royal Bank of Scotland Group Plc's index of manufacturing in the 13 euro nations unexpectedly fell to 55 from 55.4 in April. A reading above 50 indicates growth. Economists forecast that the gauge, compiled by NTC Economics Ltd. from a survey of 3,000 purchasing managers, would increase to 55.5, the median of 38 estimates in a Bloomberg News survey showed.

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