Last week there was a double dose of bad news. First up the report that showed consumers slowed spending in April as consumer expenditures dropped even though incomes increased. Then later in the week was the news that the revised GDP estimate for first quarter turned negative, thanks primarily to slower business spending. The news from the housing market did not improve the picture much, with national house prices now barely posting month over month increases. On the bright side Consumer Confidence did increase last month.
This week is very busy with both the ISM and the ISM non-manufacturing surveys, Auto Sales, the Fed’s Beige Book and then Employment Report top it off.
News of Note
The second estimate of GDP first quarter was revised down to a decrease of 1.0 percent. The revisions in the primary components were:
- Personal consumption was revised up to 3.1 percent and added 2.09 percentage points to GDP.
- Gross Private Domestic investment was revised down to a negative 11.7 percent and it detracted 1.98 percentage points from GDP.
- Exports were down 6.0 percent while imports were up 0.7 percent for a net effect of subtracting 0.95 percentage points from GDP.
Government spending was revised down to a negative 0.8 percent and it subtracted 0.15 percentage points from GDP.
- New orders for durable goods increased 0.8 percent in April. Excluding transportation new orders increased 0.1 percent and excluding defense new orders increased 0.8 percent.
- In April personal consumption expenditures decreased 0.1 percent while personal income increased 0.3 percent. The personal savings rate was 4.0 percent, up from 3.6 percent a last month year ago.
- Consumer Confidence increased 1.3 points to 83.0 in April.
- Initial unemployment claims for the week ending May 24 decreased 27,000 to 300,000. The four week moving average of 311,500 was down 11,250 from the previous week.
- According to S&P/Case-Shiller nationwide house prices increased 0.2 percent. Compared to last year prices were up 10.3 percent.
 Gross Domestic Product, 1st quarter 2014 (first estimate) U.S. Department of Commerce- Bureau of Economic Analysis, May 29, 2014, http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm  Manufacturers’ Shipments, Inventories, and Orders (M3), U.S. Census Bureau, May 27, 2014 http://www.census.gov/manufacturing/m3/  Personal Income and Outlays, April 2014, U.S. Department of Commerce Bureau of Economic Analysis, May 30, 2014, http://www.bea.gov/newsreleases/national/pi/pinewsrelease.htm The Conference Board Consumer Confidence Index® Improves in May, The Conference Board, May 27, 2014, http://www.conference-board.org/data/consumerconfidence.cfm  Unemployment Insurance Weekly Claims Report, U.S. Department of Labor, May 29, 2014, http://www.dol.gov/ui/data.pdf  Home Prices Rise in March According to the S&P/Case-Shiller Home Price Indices, Standard & Poor’s, May 27, 2014, http://www.standardandpoors.com/indices/sp-case-shiller-home-price-indices/en/us/?indexId=spusa-cashpidff–p-us—-