Here’s a mixed bag of economic reports. They won’t have you doing handsprings.
Per MarketWatch pending home sales were up 0.1% in May. That’s so small that is counts as nothing more than noise. At the same time, MarketWatch reports that mortgage applications for last week were down 18.9%. Applications for home purchases were off 4.5%.
It’s been a good spring for housing sales particularly, or should I say almost exclusively, at the lower end. I wouldn’t say that these two numbers indicate the market is running out of steam but they do make me sit up and take notice. Between extremely low interest rates and federal and state tax credits, the housing market is benefiting from an extraordinary level of subsidy. If it can’t sustain itself with that sort of tail wind then it’s a long way from health.
MarketWatch said the ISM index came in at 44.8% versus a reading of 42.8% in May. Though this shows the manufacturing sector is still in contraction mode, or no-growth mode, it does represent a continuation of an upward trend in the statistic.
From Jake at EconompicData.com, here is how the components looked:
I think you can take some heart from the ISM numbers but the housing report concerns me. If that sector doesn’t start showing some real strength then we are going to be mired in this swamp for an indeterminate time.