Economic Update 07.06.09

On Tuesday, June 30, the Conference Board reported that its consumer confidence index fell to 49.3 in June from a slightly revised 54.8 in May. Economists had expected an increase to 55. The index was bench-marked at 100 in 1985, a year chosen because it was neither a peak nor a trough in consumer confidence.

The 20-city housing price index dropped 18.1% from April 2008 to April 2009. It was the third straight month the index didn’t post record drops, indicating that the slump in home values might be easing.

The Institute for Supply Management reported the monthly index of manufacturing activity rose to 44.8 in June from 42.8 in May. Though any reading below 50 signals contraction, it was the sixth consecutive monthly increase from a record low of 32.9 in December.

The Commerce Department reported total construction spending fell 0.9% in May. Economists had expected a 0.5% decline. Meanwhile, construction spending in April was downwardly revised to a 0.6% gain. Also, a March increase of 0.4% was revised to a 0.4% drop.

The National Association of Realtors reported that its pending home sales index, a forward-looking indicator based on signed contracts, rose 0.1% to 90.7 in May from an upwardly revised 90.6 in April. It was the fourth consecutive monthly increase after the index hit a record low in January.

The Commerce Department reported factory orders rose 1.2% in May, after a revised 0.5% increase in April. It was the first back-to-back increase in nearly a year.

The Labor Department reported the jobless rate rose to 9.5% in June from 9.4% in May. That’s the highest level since August 1983.

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