Daily Economic Update: Mortgage Applications, Manufacturing

Each day the Research staff takes a look at recently released economic indicators, addressing what these indicators mean for REALTORS® and their clients. Today’s update highlights mortgage purchase applications, manufacturing and construction spending.

• Mortgage applications declined 4.0 percent for the week ending May 27.
• The Purchase index remained unchanged from the previous week. The seasonally unadjusted Purchase Index was 7.6 percent higher compared with a year ago.
• Refinancing activity declined 5.7 percent from the prior week.  Mortgage rates on a 30-year fixed mortgage increased from 4.69 percent to 4.58 percent during the week.
• Based on the May ADP National Employment report, nonfarm private business employment increased by 38,000 jobs between April and May.  Employment increased among small (<50 workers) and medium-sized (50-to-499 workers) businesses, and declined in large businesses.
• Employment has slowed significantly in May, in tandem with other economic indicators.
• The ISM Manufacturing Index measures manufacturing activity through a survey of supply executives.  A reading above 50 indicates growth while a reading below 50 percent indicates shrinking activity.
• The ISM Index declined 6.9 percentage points in May, to a value of 53.5. While the value remains expansionary, May’s data points to a slowdown in manufacturing.
• All manufacturing sub-indexes decreased, including new orders, production, supplier deliveries, inventories, prices, exports, and imports.
• Manufacturing employment also declined in May by 4.5 percentage points.
• Manufacturing executives expect softening in manufacturing conditions, following the broader economic slowdown.
• Construction spending posted a slight increase in April 2011 due to growth in private and public residential completions. However, the overall construction spending is still 9.3 percent below a year ago.