Economic data

The April Chicago PMI was a better than expected 63.8 vs the estimate of 60. It’s up from 58.8 in March and at the highest since April ’05. New Orders rose 3.4 pts to 65.2, just below the recent high of 66.4 and Order backlogs rose 7 pts to 61.4. The Employment component rose 4 pts to 57.2 and just shy of the recent high in Jan of 59.8. After spiking in March to 52.4, Inventories slipped back to 50.1. Prices Paid, following the recent rise in commodity prices, rose to 71.4 from 66.6, the highest since Sept ’08. The ISM will reconcile the regional surveys on Monday and will provide us with an export component which has been a nice source of strength for US manufacturing. Looking out towards the rest of the year following the inventory restocking boost to growth, all eyes have to be on end demand to see whether the manufacturing rebound is sustainable at current levels.

The final April UoM confidence # was 72.2, 1.2 pts above expectations and is up from the preliminary reading on April 16th of 69.5 but is down from 73.6 in March and is the lowest since Nov ’09. This survey has been tracking the weekly ABC poll which also has been lackluster relative to the better economic data seen and the extraordinary optimism of the US stock market. Both Economic Conditions and the Outlook rose from the 1st April reading but both fell from March. One year inflation expectations at 2.9% were flat with the 1st April survey but up from 2.7% in March and is at the highest since Oct ’09. Gasoline prices, which of course are a daily, high profile price point for the average consumer, rose last night to the highest level since Oct ’08 at $2.88 per gallon, up from $2.05 one year ago. We’ll see next week’s jobs data to give color on whether confidence may turn better or not from here.

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