This week’s economic indicators continued to show both bullish and bearish signs:
- The FOMC retained language that the fed funds rate likely will remain exceptionally low for an extended period. The vote was 9 to 1 for the statement with Kansas City Fed voting against.
- New factory orders for durable goods in May declined 1.1% after jumping a revised 3.0% in April. A large swing in the volatile Aircraft sector dragged the number down, but advances were widespread in other components-including primary metals, machinery, computers & electronics, and other durables.
- The bears are definitely out in the Housing market this month. First existing home sales fell 2.2% then new home sale dropped to 300k in May, the consensus was 400k. There is growing fear that government stimulus was the life support for housing and may have expired too soon.
- First quarter growth turned out to be less robust than expected. 1st quarter GDP was revised down to an annualized 2.7 pace from the prior estimate of 3.0%
Source: The Federal Reserve, The National Association of Realtors, The Census Bureau of the Department of Commerce, Bureau of Economic Analysis and U.S. Department of Commerce.