Economic Watch: Manufacturing Hits Nine-Month Low, Home Sales Rebound
A first look at the nation’s manufacturing sector this month shows conditions have hit a nine-month low, while home sales have roared back amid near-term expectations the overall economy will continue with a moderate expansion.
The seasonally adjusted Flash U.S. Manufacturing Purchasing Mangers’ Index (PMI) from financial information services provider IHS Markit fell from a final May level of 52.7 to a preliminary reading of 52.1 in June.
While a level above 50 indicates manufacturing activity is expanding, this is the slowest pace since last September.
The weaker PMI reading largely reflected softer rates of output and new business growth in June, which more than offset stronger contributions from job creation and inventory building, according to the report.
According to Chris Williamson, chief business economist at IHS Markit, the U.S. economy is ending the second quarter on a softer note.
“The average expansion seen in the second quarter is down on that seen in the first three months of the year, indicating a slowing in the underlying pace of economic growth,” he said. “While official GDP [gross domestic product] data are expected to turn higher in the second quarter after an especially weak start to the year, the relatively subdued PMI readings suggest there are some downside risks to the extent to which GDP will rebound.”
A final reading on June will be out in early July, along with the more closely watched monthly survey of purchasing managers from the Institute for Supply Management.
New, Existing Home Sales Come Back to Life
This report came as separate ones showed the market for both new and existing homes has turned around.
New home sales in May increased 2.9% from the month before to a seasonally adjusted annual rate of 610,000 while the April level was revised upward, according to the Commerce Department.
When May is compared to the same time a …Read the rest of this story
