6/2: MetroIntelligence Economic Update by P. DUFFY

Construction spending dips 2.9 percent in April, but up 3.0 percent year-on-year

Construction spending during April 2020 was estimated at a seasonally adjusted annual rate of $1,346.2
billion, down 2.9 percent from March but up 3.0 percent year-on-year.  During the first four months of
this year, construction spending amounted to $412.5 billion, 7.1 percent above the $385.2
billion for the same period in 2019.



May manufacturing sector index rebounds 1.6 points to 43.1

ISM’s May PMI® for manufacturing registered 43.1 percent, up 1.6 percentage points from the April reading of 41.5 percent. This figure indicates expansion in the overall economy after April’s contraction, which ended a period of 131 consecutive months of growth. May appears to be a transition month, as many panelists and their suppliers returned to work late in the month. However, demand remains uncertain, likely impacting inventories, customer inventories, employment, imports and backlog of orders.



Personal savings rate soars in April as stimulus money arrives, but personal spending plummets

While personal income increased 10.5 percent in April (due largely to stimulus boosts from the federal gov’t), personal spending still fell by a record 13.6 percent. The personal savings rate soared to 33.0 percent, by far the highest rate noted in the history of the survey dating back to 1960.



Inflation tracker PCE Price Index slips 0.3 percent in April, up 1.3 percent year-on-year

The PCE Price Index fell 0.3 percent during April, but was still up 1.3 percent year-on-year. The ‘core’ index (minus food and energy) fell 0.1 percent during April, but was up 1.7 percent year-on-year.



Consumer sentiment edges up to 72.3 in later May survey

Consumer sentiment has remained largely unchanged during the past two months, with the final May estimate just a half index point above the April reading to 72.3  The CARES relief checks and higher unemployment payments have helped to stem economic hardship, but those programs have not acted to stimulate discretionary spending due to uncertainty about the future course of the pandemic.