General: The US economy may not quite be at a state of slow-down, but it has definitely reached a state of ambiguity. There are some signs of cooling down, however, May also saw increased retail sales, even though the bellwether, Wal Mart, disappointed. Also, Federal Reserve Chairman Barnanke and his concern about inflation spooked the US stock markets and the Dow Jones fell to under 11,000 points.
GDP: The initial figure of 4.8% for Q1 was revised to an impressive 5.3% annual rate. The outlook for the second quarter will be closer to 3%, which would still be a strong performance.
Unemployment: went down to 4.6% in April; but non farm payrolls expanded by only a scant 75,000 jobs (instead of the expected 180,000 jobs)
Trade balance: - $806.1 bn in March for the last twelve months
Budget Deficit: 3.8% of GDP in April
Consumer Price Index: + 3.5% annual rate in April (same as April 2005)
Producer Prices: + 4.0% annual rate in April (4.8% in April 2005)
Industrial Production: + 4.7% in April (4.6% in April 2005)
Productivity: + 3.7% in Q1 after falling 0.7% in Q4 2005
Steel Production: 8.043 million mt in April
Special Focus: The US consumer. Various reports show that the consumer is getting squeezed by the high (for US standards) gasoline prices. At the present time, the average price is around $3.00 per gallon or Euro .62 per liter.
Retail sales in May went up, but Wal Mart's increase of 2.3% was disappointing.
Housing reports are full of gloom. Construction spending fell 0.1% in April, there was a 1.1% drop in April for residential buildings, and pending sales of existing homes fell 3.7% in April compared to March, and 11.7% compared to April 2005. The average home price rose 12.5% in Q1, but for the first time since 2002, home prices fell in some states.
Automotive sales did not fare much better. GM's sales declined by 12% in May, Ford's sales went down 1.9%, and Chrysler's by 11%. Toyota's plants in the US increased their sales by 17% in May. Guess who sells the most fuel efficient cars?