Economic Update – May 9, 2011

The Institute for Supply Management reported that the monthly composite index of manufacturing activity fell to 60.4 in April after reaching 61.2 in March. A reading above 50 signals expansion. It was the 21st straight month of expansion.

Total construction spending rose 1.4% to $768.9 billion in March, following a 1.4% decrease in February. Economists had anticipated an increase of 0.5% in March.

Retail sales fell 0.8% for the week ending April 30, according to the ICSC-Goldman Sachs index. On a year-over-year basis, retailers saw sales increase 2.8%.

Factory orders rose 3% in March to a seasonally adjusted $462.9 billion, following an upwardly revised 0.7% increase in February. Excluding the volatile transportation sector, orders rose 2.6%.

The Mortgage Bankers Association said its seasonally adjusted composite index of mortgage applications for the week ending April 29 rose 4%. Refinancing applications increased 6%. Purchase volume rose 0.3%.

The Institute for Supply Management reported that the monthly composite index of non-manufacturing activity fell to 52.8 in April from 57.3 in March. A reading above 50 signals expansion. It was the 16th straight month of expansion in the services sector.

The Labor Department reported that in the first quarter productivity rose at an annual rate of 1.6% and labor costs increased at an annual rate of 1%.

Initial claims for unemployment benefits rose by 43,000 to 474,000 for the week ending April 30. Continuing claims for the week ending April 23 rose by 74,000 to 3.73 million. The monthly unemployment rate rose to 9% in April from 8.8% in March.

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