5/22: MetroIntelligence Economic Update by P. DUFFY

May economic output index rebounds 35 percent from April to 36.4, but still in contraction territory

Adjusted for seasonal factors, the IHS Markit Flash U.S. Composite PMI Output Index posted 36.4 (anything below 50 is contraction) in May, up from 27.0 in April, but nonetheless indicating the second-sharpest decline in business
activity since the series began in late-2009. The IHS Markit Flash U.S. Manufacturing Purchasing Managers’ Index posted 39.8 in May, up from 36.1 at the start of the second quarter. Similarly, the seasonally adjusted IHS Markit Flash U.S. Services Business Activity Index registered 36.9 in May, up from the record low of 26.7 in April, but nonetheless signalling one of the most severe contractions in service sector activity on record.



Initial unemployment claims dip to 2.4 million in weekly report

In the week ending May 16, initial unemployment claims were 2,438,000, a decrease of 249,000 from the previous week’s revised level. Over the last nine weeks, a total of 38.6 million people have filed for unemployment benefits related to Covid-19.



April existing home sales plummet 17.2 percent, but prices up 7.4 percent year-on-year

Total existing-home sales dropped 17.8 percent from March and 17.2 percent year-on-year to a seasonally-adjusted annual rate of 4.33 million in April.  The median existing-home price for all housing types in April was $286,800, up 7.4 percent from April 2019.  Total housing inventory at the end of April totaled 1.47 million units, down 1.3 percent from March, and 19.7 percent year-on-year.  Unsold inventory sits at a 4.1-month supply at the current sales pace, up from 3.4-months in March and down from the 4.2-month figure recorded in April 2019.



April pending home sales index fell 29.2 percent from March and 32.5 percent year-on-year

Pending new home sales in April fell 32.5 percent compared to last year with an improving trend starting in the latter part of the month. New home sales were off by 29.2 percent compared to March.



Leading Economic Index slipped another 4.4 percent to 98.8 in April

The Conference Board Leading Economic Index® (LEI) for the U.S. declined 4.4 percent in April to 98.8 (2016 = 100), following a 7.4 percent decline in March, and a 0.2 percent decline in February.  The erosion has been very widespread, except for stock prices and the interest rate spread which partially reflect the rapid and large response of the Federal Reserve to offset the pandemic’s impact and support financial conditions.