Last week was another week of mixed economic reports – with more NEGATIVE developments than POSITIVE developments.
Below is a succinct list of last week’s events:
Positives:
1) Average duration of unemployment while still high, falls to 1 yr low.
2) Initial Jobless Claims end 3 week run above 380k and total 14k less than expected at 365k.
3) Institute of Supply Management manufacturing index surprises to upside, especially in light of regional weakness, at 54.8 vs 53.4 in March and estimate of 53. Best since June ’11.
4) Vehicle sales hang in above 14million for 4th straight month.
5) Q1 Home Ownership rate falls to 65.4%, back to the 57 year average, things normalizing, renting helps create more dynamic, mobile, flexible economy.
6) Royal Bank of Australia cuts rates an unexpected 50bps. Having conducted one of the most stable monetary policies (kept rates above rate of inflation) over the past 30 yrs, they have room to maneuver.
7) Spanish and Italian bond yields fall.
Negatives:
1) April Payrolls rise only 115k, 130k of which from the private sector. Participation rate falls to lowest since 1981, household survey declines as does size of labor force, average hourly earnings flat month over month and up just 1.8% year over year, still below the rate of inflation.
2) Institute Supply Management services in April falls to lowest since Dec at 53.5 vs 56 in March.
3) Retail comps in April miss expectations (could this be a weather give back?) .
4) Spain’s economy as expected officially back in recession.
5) German unemployment unexpectedly rises in April.
6) Euro zone manufacturing and services composite index revised to 6 month low.
7) United Kingdom manufacturing and services indices also fall to multi month low.
8) Euro zone Consumer Price Index up 2.6% year over year vs 2.7% in March, above estimate of 2.5% and higher than 2% European Central Bank target rate for 17 straight mo’s.
9) Spanish and Italian stocks trade lower again.
10) China’s Purchasing Managers Index services component falls to 3 month low and while mfr’g Purchasing Management Index up at best since Mar ’11, was slightly softer than expected.
Source: The Big Picture