Economic growth in the US remains sluggish and the possibility of a double-dip recession just isn't going away. The two big-and all too familiar-problems are unemployment and housing. May had nothing but bad news; no appreciable amount of jobs was generated and the 272,000 new entries into the job market could not find one. Worse, the labor underutilization (U-6) rate has been stuck around 16 percent for over a year now. Housing numbers remain dismal in every sector and average home values have now dropped to 2002 levels. The US Federal Reserve has no clear cut options left, and after two "quantitative easing" programs, a third one is highly unlikely on numerous grounds. The automotive industry is one of the brighter spots of the US economy, even though sales in May did drop somewhat because of parts shortages, higher gasoline prices and practically no financial incentives for a consumer whose confidence is vanishing by the day.
- GDP: Up 1.8 percent in Q1 from Q4 2010. Compared with Q1 2010, the growth was up 2.3 percent
- Consumer Prices: Up 3.2 percent in April (up 2.2 percent compared to a year ago)
- Consumer Confidence: 60.8 in May, down from 66.0 in April
- Industrial Production: No growth in April from March, and up 5.0 percent growth compared with April 2010
- Producer Prices: Up 0.8 percent in April from March; up 6.8 percent compared to April 2010
- Unemployment: 9.1 percent in May
- Trade Deficit: $43.67 billion in April compared to $46.8 billion in March. Exports were up and imports fell, reflecting the continuing weakness of the US dollar.
- Currency: 0.68 Euro to one US dollar as of June 8 (0.83 a year ago)
- Housing: Recent April data show simply no good news. Housing starts in April fell to a seasonally adjusted annual rate of 523,000 units. This is 10.6 percent lower than the adjusted March rate and 23.9 percent below last year. Housing permits fell 4.0 percent to a seasonally adjusted annual rate of 551,000 units. This is 4.0 percent below the adjusted March figure and 12.8 percent below last year. Existing home sales in April decreased 0.8 percent from March to a seasonally adjusted annual rate of 5.05 million units. This is 5.0 percent below last year. The national median existing-home price for all types was $163,700, down 5.0 percent from a year ago. Total housing inventory at the end of April increased to 3.87 million units, representing a 9.2-month supply at the current sales rate.
- Automotive Industry: 698,736 units of light vehicles were produced in May or 5.8 percent more than last year. In the first five months of the year 3,536,714 units were produced or 11.5 percent more than last year.
- Steel Production: 7.10 million metric tons in April or 2.1 percent above last year. In the first four months of the year 28.3 million metric tons were produced or 6.8 percent more than last year.
- Purchasing Managers' Index: According to the Institute for Supply Management, the PMI fell to 53.5 in May from 60.4 in April--but is still the 22nd consecutive month of growth, albeit at a slower pace.
Other data in that report were as follows:
New Orders: 51.0 (61.7 in April) - trend is "growing" but just barely
Production: 54.0 (63.8) - "growing" but at a slower pace
Inventories: 48.1 (53.6) - "contracting"
Customers' Inventories: 39.5 (40.5) - "too low"
Manufacturing Sector: "growing" for 22 consecutive months but at a slower pace
Overall Economy: "growing" for 24 consecutive months but at a slower pace