The past week saw more data points that confirmed the soft patch, although most economists are optimistic of a bounce back from the slackness. Higher oil prices and the natural disaster in Japan are largely considered responsible for the setback and therefore, it is seen as transient phenomena. Since then oil prices have underwent some degree of correction and the negative impact of the Japanese quake on growth could soon may reverse itself and begin to prop up growth from the rebuilding efforts underway there.
Danske Bank said it expects the uncertain environment to linger a while, but it expects it to be another "false" growth scare, as the slowdown is likely to be temporary. Among the last week's numbers, initial jobless claims unexpectedly spiked. Durable goods orders declined by more than expected in April, although the numbers weren't that negative considering the previous month's upward revision. Reinforcing the lackluster recovery seen in the housing market, pending home sales plunged sharply pointing to anemic existing home sales in the coming month.
Even as Main Street data from the U.S. creates uneasiness, the sovereign debt crisis plaguing the euro zone is intensifying. Opinions vary about the debt re-profiling being discussed for Greece. There have been reports that Greece may voluntarily seek an extension of its debt maturities, although the European Central Bank Governing Council members are opposed to a re-profiling move. Meanwhile, China, world's most prolific growth engine, is voluntarily restraining growth by adopting monetary policy actions.
The Commerce Department reported last week that new home sales in the U.S. rose 7.3 percent month-over-month in April to a seasonally adjusted annual rate of 323,000 units, marking the highest level in four months. New home sales rose in all the four regions. Inventories in absolute terms fell by about 5,000 to 175,000, while in terms of months of supply, inventories fell to 6.5 months from 7.2 months.
At the same time, the Federal House Finance Agency said its house price index fell 0.3 percent month-over-month in March compared to the 0.5 percent drop expected by economists.
The pending home sales index released by the National Association of Realtors fell 11.6 percent month-over-month in April, declining to a 7-month of low. Pending home sales index declined in all the regions except the North East, where it rebounded by 1.7 percent. The decline in the headline number is attributed to weather impact and foreclosures.
Consumer sentiment is seeing a slight bounce, as reflected by the final reading of the Reuters/University of Michigan's consumer sentiment, which improved to 74.3 in May from 69.8 in April.
Preliminary estimates released last week showed that GDP increased by 1.8 percent in the first quarter, unchanged from the advance estimate provided a month ago. Economists had been expecting the pace of GDP growth to be upwardly revised to 2.1 percent.
Meanwhile, personal income increased by 0.4 percent in April, with the increase matching the growth seen in each of the two previous months. Consumer spending also rose by 0.4 percent in April following a 0.5 percent increase in March. Both increases were in line with what most economists had predicted.
The consumer price index increased 0.3 percent in April, somewhat slower than the 0.4 percent increase in March. Removing the volatile energy and food sectors, the price index increased by a more modest 0.2 percent in April compared to a 0.1 percent increase in the previous month.
The unfolding week's economic calendar is heavily loaded despite it being a truncated week. The non-farm payrolls report for May, the weekly jobless claims report, the Conference Board's consumer confidence index for May, the results of the Institute for Supply Management's national manufacturing and service sector surveys for May are among the key economic reports scheduled for the week.
Traders may also focus on the ISM-Chicago's manufacturing survey, monthly auto sales, the Commerce Department's construction spending report for April and the final first quarter productivity and costs report of the Labor Department. Some Fed speeches and announcements concerning Treasury auctions of 3-year and 10-year notes and 30-year bonds round up the economic events of the week.
Job growth may have slackened slightly in May due to supply chain disruptions. The pace of job growth in the private sector may also have moderated and additionally, the government may also have shed jobs. Capital Economics also sees a slower pace of growth in temporary employment. That said, the underlying trend in the job market points to a steady recovery. McDonald's hiring is expected to have boosted hiring in the food service sector.
The momentum of activity in the manufacturing sector is slowing, with the Japanese quake-related supply disruptions hurting the auto industry and in turn manufacturing activity. Additionally, the sector is also facing constraints due to rising input costs. BMO Capital Markets expects the sector to see a return to vibrant activity in the summer as activity in the auto industry ramps up.
Auto sales are expected to moderate from the 13 million unit-annual rate seen in the previous three months, with supply disruptions and the recent rise in gasoline and vehicle prices being the culprits.
Monday
The markets are closed on Monday on account of "the Memorial Day" holiday.
Tuesday
The S&P/Case-Shiller home price index, which tracks monthly changes in the value of residential real estate in 20 metropolitan regions across the U.S., is scheduled to be released at 9 AM. Economists expect a 0.2 percent month-over-month drop and a 3.4 percent year-over-year decline in the 20-city composite house price index for March.
The S&P/Case-Shiller house price survey for March showed that its 20-city house price index fell 0.2 month-over-month and was down 3.3 percent annually, marking the biggest drop since November 2009.
The results of the Institute of Supply Management-Chicago's business survey for May are scheduled to be released at 9:45 AM ET. Economists expect the business barometer index based on the survey to decline to 63.
The business barometer for April suggested slackness, although indicating a strong and expanding economic activity for the nineteenth straight month. The index fell to 67.6 in April from 70.6 in March. The production, new orders, orders backlogs and employment indexes all declined from the month-ago levels.
The Conference Board is scheduled to release its consumer confidence report for April at 10 am ET. The report, which is based on a survey of 5,000 U.S. households, is expected to show that the consumer confidence index rose to 66.5 in May.
The consumer confidence index rose 1.6 points to 65.4 in April, with confidence improving to its second highest level since early 2008. The present situation index rose 2.1 points to 39.6, while the expectations index edged up 1.3 points to 82.6.
Wednesday
Individual automakers are scheduled to release their monthly U.S. sales results for April. The data will reveal the unit sales of domestically produced cars and light duty trucks, including sports utility vehicles and mini-vans, during the month.
The ADP National Employment report, which sheds light on non-farm private employment, is scheduled to be released at 8:15 AM ET. The report is usually released two days prior to the Labor Department's employment report.
The results of the manufacturing survey of the Institute for Supply Management, which are based on data compiled from purchasing and supply executives nationwide, are due out at 10 AM ET. Economists expect the index to show a reading of 57.5 for May.
The pace of expansion in the manufacturing sector slowed in April. The manufacturing index declined 0.8 points to 60.4 in April. Seventeen of the eighteen industries reported growth. New orders moderated, with the corresponding index sliding 1.6 points to 61.7 and the production index declined 5.2 points to 63.8. On the other hand, the backlog orders index rose to 61 from the previous month's 52.5, while the employment index eased 0.3 points to 62.7.
The Commerce Department's construction spending report to be released at 10 AM ET is expected to show a 0.1 percent increase in spending for April.
In March, construction spending showed a 1.4 percent climb. Spending on private construction rose 2.2 percent compared to a more modest 0.1 percent increase in spending on public construction.
San Francisco Federal Reserve Bank President John Williams will speak on economics instruction to a conference on teaching economics and research at 10:20 am ET. Cleveland Federal Reserve Bank President Sandra Pianalto is due to speak on labor markets and monetary policy to the Columbus Metropolitan Club Forum at 12:25 pm ET.
Also scheduled to speak on the day is Federal Reserve Governor Daniel Tarullo, who will speak on U.S. and international financial regulatory reform to the Peterson Institute in Washington at 12:30 pm ET.
Thursday
The Labor Department is due to release its customary jobless claims report for the week ended May 28th at 8:30 AM ET. Economists expect claims to decline to 420,000.
The number of Americans filing new applications for unemployment insurance unexpectedly increased last week. About 424,000 Americans filed initial claims for unemployment insurance in the week ended May 21st, an increase of 10,000 from the previous week's revised figure of 414,000. The increase came as a surprise to most economists, who had anticipated initial claims to decline to roughly 404,000 from the 409,000 originally reported for the previous week.
The U.S. Labor Department is also scheduled to release its final first quarter non-farm productivity and unit labor costs at 8:30 AM. Economists expect productivity growth to be upwardly revised to 1.7 percent.
U.S. workers continued to show an increase in productivity in the first quarter of 2011, although the pace of growth slowed compared to the previous quarter.
Non-farm labor productivity increased by 1.6 percent in the first quarter, reflecting an increase in output that was somewhat diminished by an increase in hours worked.
The increase, though less than the 2.9 percent increase seen in the fourth quarter of 2010, was still slightly greater than the 1.5 percent increase predicted by most economists. Unit labor costs also increased, rising by 1 percent in the first quarter of 2011 following a revised 1 percent decrease in the fourth quarter of 2010.
The Commerce Department is due to release its report on factory goods orders for April at 10 AM ET. Economists estimate factory good orders for the month to decline by 0.9 percent.
Orders for durable good, which make up the bulk of factory goods, fell 3.6 percent month-over-month in April, while economists had expected a more modest 3 percent drop. Transportation equipment orders fell 9.5 percent, with orders for non-defense aircrafts and parts sliding 30 percent. However, even after stripping off transportation orders, orders still fell 1.5 percent, suggesting that the weakness was beyond supply disruptions.
Non-defense capital goods orders, excluding aircraft, considered a proxy for capital spending, fell 2.6 percent. As a consolation, the previous month's increase in this category was upwardly revised to 5.4 percent from 4.1 percent. Shipments of this category also fell 1.6 percent. Meanwhile, orders for computers/electronics rose 0.7 percent.
The Energy Information Administration is scheduled to release its weekly petroleum inventory report for the week ended May 27th at 10:30 AM ET. The report is released
The oil inventory report for the week ended May 20th showed that crude oil stockpiles rose by 0.6 million barrels to 370.9 million barrels. Inventories remained above the upper limit of the average range. Gasoline stockpiles increased by 3.8 million barrels, but were in the lower limit of the average range.
Meanwhile, distillate stockpiles fell by 2 million barrels and yet were in the upper limit of the average range. Refinery capacity utilization rose to 83.5 percent over the four weeks ended May 20th compared to 82.6 percent over the previous four weeks.
Friday
The Labor Department is scheduled to release its monthly non-farm payroll report at 8:30 AM. Economists expect non-farm payrolls for May to increase by 190,000, but they expect the unemployment rate to edge down to 8.9 percent.
U.S. economy continued to add jobs at a stronger rate than expected in April. At the same time, the unemployment rate edged back up to 9.0%.
The economy added a net 244,000 jobs in April, including 268,000 new private sector jobs, offsetting a loss of 24,000 government positions. Economists had expected the job growth of around 185,000.
The ISM is scheduled to release the results of its non-manufacturing survey at 10 AM. The non-manufacturing index is likely to show a reading of 54 for May.
In April, the non-manufacturing sector expanded at a slower pace, although continuing its streak of expansion for the seventeenth consecutive month. The non-manufacturing index slid 4.5 points to 52.8 in April, with 17 industries reporting growth. The business activity index fell 6 points to 53.7 and the new orders index slumped 11.4 points to 52.7. The order backlogs index was down a more modest 0.5 points to 55.5, while the employment index slipped 1.5 points to 53.
Boston Federal Reserve Bank President Eric Rosengren is due to speak to the Stanford Finance Forum in Stanford, California at 3:30 pm ET.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.