Economic Numbers: Manufacturing Looking Better, Housing Not So Much

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, 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.

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About Tom Lindmark 401 Articles

I’m not sure that credentials mean much when it comes to writing about things but people seem to want to see them, so briefly here are mine. I have an undergraduate degree in economics from an undistinguished Midwestern university and masters in international business from an equally undistinguished Southwestern University. I spent a number of years working for large banks lending to lots of different industries. For the past few years, I’ve been engaged in real estate finance – primarily for commercial projects. Like a lot of other finance guys, I’m looking for a job at this point in time.

Given all of that, I suggest that you take what I write with the appropriate grain of salt. I try and figure out what’s behind the news but suspect that I’m often delusional. Nevertheless, I keep throwing things out there and occasionally it sticks. I do read the comments that readers leave and to the extent I can reply to them. I also reply to all emails so feel free to contact me if you want to discuss something at more length. Oh, I also have a very thick skin, so if you disagree feel free to say so.

Enjoy what I write and let me know when I’m off base – I probably won’t agree with you but don’t be shy.

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