Increased Home Building Couldn’t Lift Construction Spending in April 

Census Bureau data showed 𝄹construction spending dipped for the second straight month in April, driven by a pullback in commercial and health care projects. 

If spending were to remain at its April rate for the whole year, construction expenditures would total $2,099.0 billion spending. That's a 0.1% decline from the month prior and lower than the 0.2% increase economists were anticipating. 

Residential construction wasജ 0.1% higher for April when compared with the previous mon🏅th, but it wasn’t enough to offset a 0.3% decline in nonresidential spending and a 0.2% drop in public spending.

Building on single-family homes helped drive the gains in residential construction, part of a 20% surge in spending in that category over the past year. It marks 12 straight months of increases, wrote Wells Fargo economists Charlie Dougherty, Jackie Benson and Patrick Barley. Low inventory in existing homes is often cited as a factor curtailing 澳洲幸运5开奖号码历史查询:affordability in th﷽e real🅠 estate market.

“Builders have been successful using price and rate incentives to lure buyers in the high-interest rate environment, leading to a trend improvement in single-family building this year. Conditions remain less favorable for multifamily construction amid rising apartment vacancies and tig💮hter access to financing,” the Wells Fargo note said. 

However, Oxford Economics forecast a second-quarter decline in residential construction🐓 investment, as the data showed lower construction spending could pose a risk to econoಞmic growth. 

"澳洲幸运5开奖号码历史查询:Weaker home sales are weighing on residential investment via brokers' commissions and offဣsetting gains in single-family construction and home improvements,” wrote Bernard Yaros, lead U.S. e🦋conomist at Oxford. 

-Terry Lane

Price Pressures Continued For Manufacturers in May

Market watche𒀰rs got mixed signals from a pair of closely watched manufacturing surveys, with one showing activity falling and another pointing to a rise in inflation.

The 澳洲幸运5开奖号码历史查询:Institute of Supply Management𝓰 (ISM) manufacturing 澳洲幸运5开奖号码历史查询:Purchasing Managers’ Index (PMI)  came in at 48.7% in May,  a drop of half a percentage point from April, and lower by almost a full percentage point than what economists were expecting. Helping drive down the ISM reading was a drop in new ord▨ers and pro♍duction. 

“Demand remains elusive as companies demonstrate an unwillingness to invest due to current monetary policy and other conditions," said Timothy Fiore, chair of ISM’s Manufacturing Business Survey Committee.

Along with the manufacturing PMI from S&P Global Marke✅t Intelligence also released today, ISM's report also pointed to continued price pressures. Both indices are measured through monthly surveys of managers in the manufacturing industry. The ISM Prices Index showed raw material prices surged for the fifth straight month.

Meanwhile, the S&P report painted a worse picture of prices. Input costs for manufacturers rose at their fastest level since A✱pril 2023, their third consecutive month of moving higher. In return, firms also raised their selling prices, though the pace of inflation dr﷽opped from April to settle at a five-month low. 

“Although output prices rose at a slower pace in May, this is unlikely to be sustainable should cost burdens ramp up further in the months ahead,” said S&P's Economics Director Andrew Harker.

-Terry Lane

The Economy Is Rewarding The Rich More Than Usual

As if it wasn’t hard enough to make ends meet on a low income, today’s economic trends are making it more difficult than usual—while enriching high earners.

🌠That’s according to an analysis Friday by Michael Pearce, chief U.S. economist at Oxford Economics, who examined the impact that inflation, high interest rates, and labor market trends are having ไon people in different income brackets. 

The economy is putting the squeeze on low earners in several ways. The recent 澳洲幸运5开奖号码历史查询:slowdown in the labor market has hit low earners the hardest, with wage growth slowing down the most for the bottom 25% of earners in recent months. That’s a reversal from the last few years when hot demand for labor drove up wages for the lowest earners.

To make matters worse, inflation has hit lower-income households harder than other groups. Some of the items that have gone up the most in price—such as gas and rent—make up a disproportionately large share of the budgets of lower-income earners.

Furthermore, the pandemic-era government stimulus progrꦿams—things like expanded child tax credits and stimulus chꦚecks, which especially helped poorer households—are now distant memories, and any money from them that was saved seems to have been spent based on bank deposit data, Pearce said.

“It appears that to the extent there are still remaining savings, they are concentrated among higher-income households,” he said.

While most households are still muddling through, often relying on credit card debt, a small but growing number are falling behind. Economists at the Federal Reserve Bank of New York noted a 澳洲幸运5开奖号码历史查询:sharp uptick in credit car🦄d delinquency in the first quarter of the year. 

High interest rates, the result of the Federal Reserve’s battle against inflation, are making credit card debt more burdensome, although Pearce pointed out that the overall 澳洲幸运5开奖号码历史查询:level of consumerꦺ debt is🌜 still relatively low.

Meanwhile, high earners are benefitting from ꦏmany of those same trends.

High interest rates have rewarded people with extra money to save, enabling them to enjoy the 澳洲幸运5开奖号码历史查询:highest returns in decades on things like certificates of deposit. 澳洲幸运5开奖号码历史查询:Soaring home prices, which have made housing 澳洲ᩚᩚᩚᩚᩚᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ𒀱ᩚᩚᩚ幸运5开奖号码历史查询:unaffordable for many first-time buyers, have added to the 澳洲幸运5开奖号码历史查询:net worth of longtime homeowners with fixed-rate mortgages (or none at all) who tend to be higher earners. The record-breaking stock market has also made the haves richer while leaving the have-nots behind.

The trend was noted separately by James Knightley, chief international economist at ING in a commentary Friday, who said the health of the economy increasingly relies on spending from the top 20% ಞof earners, who spend as much as the bottom 60% combined.

“The top 20% are doing very well with good, high-paying jobs, tending to own their own home (largely with low long-term mortgage rates) and can make 5% in money market funds while feeling the benefits of higher stock and home prices. The bottom 60% are feeling more stress with far less wealth exposure,” he wrote.