7/2: EconUpdate by P. Duffy

EconUpdate by P. Duffy

Construction spending slips 0.3 percent in May, but up 7.5 percent year-on-year

What does this mean? Despite the slightly monthly dip, construction spending continues to grow, especially for residential housing.

Construction spending during May 2021 was estimated at a seasonally adjusted annual rate of $1,545.3 billion, 0.3 percent below April but up 7.5 percent year-on-year.  During the first five months of this year, construction spending amounted to $594.8 billion, 4.6 percent above the $568.5 billion for the same period in 2020.  Spending on private single-family homes rose 0.8 percent in May, and was up 46.1 percent year-on-year.  Spending on multi-family units was flat in May from April, and rose 25.6 percent year-on-year.

Initial unemployment claims fall 12.3 percent to 364,000, lowest level since mid-March of 2020

What does this mean?  Although continued claims in the prior week did rise by 1.6 percent, the overall trend is towards declining unemployment claims.

In the week ending June 26, initial unemployment claims were 364,000, a decrease of 51,000., or 12.3 percent, from the previous week’s revised level. This is the lowest level for initial claims since March 14, 2020 when it was 256,000. Continued claims during the week ending June 19 were 3,469,000, an increase of 56,000, or 1.6 percent, from the previous week’s revised level. The total number of continued weeks claimed for benefits in all programs for the week ending June 12 was 14,659,791, a decrease of 180,890, or 1.2 percent, from the previous week.

June manufacturing sector index slips 0.6 points to 60.6, but still well into growth mode

What does this mean?  Although shortages of supplies and labor and other challenges remain, the manufacturing sector continues to rebound.

The June Manufacturing PMI® registered 60.6 percent, a decrease of 0.6 percentage point from the May reading of 61.2 percent. This figure indicates expansion in the overall economy for the 13th month in a row after contraction in April 2020. However, panelists report that record-long raw-material lead times, wide-scale shortages of critical basic materials, rising commodities prices and difficulties in transporting products are continuing to affect all segments of the manufacturing economy. Worker absenteeism, short-term shutdowns due to parts shortages, and difficulties in filling open positions continue to be issues that limit manufacturing-growth potential.