- ISM Manufacturing for July rose to 56.6 versus estimates of 54.5 and a reading of 53.8 in June.
- ISM Prices Paid for July fell to 48.5 versus estimates of 52.5 and a reading of 50.5 in June.
- Pending Home Sales for June rose .6% versus estimates of a .8% increase and a 1.5% decline in May.
BOTTOM LINE: US construction spending unexpectedly declined for a fourth month as the pace of homebuilding slowed, Bloomberg reported. Construction spending is still 7.9% higher year-over-year. The recently passed highway bill should boost construction spending going forward.
US manufacturing accelerated for a second straight month in July to the best level of the year as gains in both orders and production signaled that factories may add more to economic growth this quarter, Bloomberg reported. The new orders component of index rose to 60.6 versus 57.2 in June. The prices paid component of the index fell to 48.5 last month, the lowest level in 3 years, from 50.5 the prior month. The employment component of the index rose to 53.2 versus 49.9 in June. Finally, the new export orders component rose to 55.9 from 50.4 in June. Overall, a very good manufacturing report and further evidence that manufacturing will now add to economic growth going forward.
Contracts to buy previously owned US homes rebounded to the third highest level ever in June as buyers took advantage of the lowest long-term mortgage rates in 15 months, Bloomberg reported. The index increased .7% in the Midwest, 3.5% in the West, .4% in the South and fell 3.2% in the Northeast. This number bodes well for future home sales. I continue to believe home prices will moderate, not plunge.
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