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Report from
North America
US manufacturing sector posts gains in March
Economic activity in the manufacturing sector expanded in
March for the first in six months, according to the Institute
for Supply Management.
The majority of industries reported an increase in new
orders and production. The price of raw materials
increased for the first time since October 2014. Furniture
manufacturing expanded in March, while output in the
wood products sector was unchanged from February.
Real GDP increased at an annual rate of 0.5% in the first
quarter of 2016, according to the first estimate released by
the US Bureau of Economic Analysis. GDP growth in the
fourth quarter of 2015 was revised up to 1.4% from an
earlier estimated 1.0%.
Unemployment changed little in March at 5.0%.
Employment increased in retail trade and construction,
while jobs were lost in manufacturing.
For the third time this year the US Federal Reserve
appears to hold off raising interest rates because of slow
economic growth.
The central bank raised rates in December 2015 for the
first time in nearly ten years. Earlier this year the Federal
Reserve announced it would raise rates twice in 2016.
Four consecutive monthly declines in US consumer
confidence
April marked the fourth consecutive monthly decline in
consumer confidence, according to the University of
Michigan Index of Consumer Sentiment. The rates of
decline have been quite small, although compared to a
year ago the consumer confidence index it was down 6.2
points in April.
Consumers reported a slowdown in expected wage gains
and growing concerns that slowing economic growth
would reduce the pace of job creation. Inflation-adjusted
personal consumption expenditures is forecast to grow by
2.5% in 2016.
Builder confidence unchanged in April
Builder confidence in the market for new single-family
homes remained unchanged in April, according to the
National Association of Home Builders/Wells Fargo
Housing Market Index.
Builder confidence has not changed in three months,
reflecting the lower number of housing starts and permits
in the first quarter of 2016. Mortgage rates are still low
and many builders expect demand to pick up in the months
ahead.
US Housing starts declined 9% in March
Housing starts in March were at a seasonally adjusted
annual rate of 1,089,000, according to US Census Bureau
data. This is 9% below the revised February estimate, but
14% higher than in March 2015.
The decline was in both single-family and multi-family
housing. Single-family homes started at a rate of 764,000
in March. Multi-family housing starts also decreased, but
rental demand is solid according to the National
Association of Home Builders. High rental demand will
continue support the construction of apartment buildings.
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