by Calculated Risk on 6/02/2025 10:00:00 AM

(Posted with permission). The ISM manufacturing index indicated expansion. The PMI® was at 48.5% in May, down from 48.7% in April. The employment index was at 46.8%, up from 46.5% the previous month, and the new orders index was at 47.6%, up from 47.2%.

From ISM: Manufacturing PMI® at 48.5% May 2025 Manufacturing ISM® Report On Business®

Economic activity in the manufacturing sector contracted in May for the third consecutive month, following a two-month expansion preceded by 26 straight months of contraction, say the nation's supply executives in the latest Manufacturing ISM® Report On Business®.

The report was issued today by Susan Spence, MBA, Chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee:

“The Manufacturing PMI® registered 48.5 percent in May, 0.2 percentage point lower compared to the 48.7 percent recorded in April. The overall economy continued in expansion for the 61st month after one month of contraction in April 2020. (A Manufacturing PMI® above 42.3 percent, over a period of time, generally indicates an expansion of the overall economy.) The New Orders Index contracted for the fourth month in a row following a three-month period of expansion; the figure of 47.6 percent is 0.4 percentage point higher than the 47.2 percent recorded in April. The May reading of the Production Index (45.4 percent) is 1.4 percentage points higher than April’s figure of 44 percent. The index continued in contraction in March for the third straight month after two months of expansion preceded by eight months of contraction. The Prices Index remained in expansion (or ‘increasing’) territory, registering 69.4 percent, down 0.4 percentage point compared to the reading of 69.8 percent in April. The Backlog of Orders Index registered 47.1 percent, up 3.4 percentage points compared to the 43.7 percent recorded in April. The Employment Index registered 46.8 percent, up 0.3 percentage point from April’s figure of 46.5 percent.

“The Supplier Deliveries Index indicated a continued slowing of deliveries, registering 56.1 percent, 0.9 percentage point higher than the 55.2 percent recorded in April. (Supplier Deliveries is the only ISM® Report On Business® index that is inversed; a reading of above 50 percent indicates slower deliveries, which is typical as the economy improves and customer demand increases.) The Inventories Index registered 46.7 percent, down 4.1 percentage points compared to April’s reading of 50.8 percent.

“The New Export Orders Index reading of 40.1 percent is 3 percentage points lower than the reading of 43.1 percent registered in April. The Imports Index plunged into extreme contraction in May, registering 39.9 percent, 7.2 percentage points lower than April’s reading of 47.1 percent.”
emphasis added

This suggests manufacturing contracted in May.  This was below the consensus forecast and new export orders were weak and prices very strong.

by Calculated Risk on 6/02/2025 08:11:00 AM

Altos reports that active single-family inventory was up 2.1% week-over-week.

Inventory is now up 28.7% from the seasonal bottom in January and is increasing.  

Usually, inventory is up about 16% from the seasonal low by this week in the year.   So, 2025 is seeing a larger than normal pickup in inventory.

The first graph shows the seasonal pattern for active single-family inventory since 2015.

Click on graph for larger image.

The red line is for 2025.  The black line is for 2019.  

Inventory was up 32.8% compared to the same week in 2024 (last week it was up 32.4%), and down 14.6% compared to the same week in 2019 (last week it was down 15.5%). 

This is the highest level since 2019.

It now appears inventory will be close to 2019 levels towards the end of 2025.

This second inventory graph is courtesy of Altos Research.

As of May 30th, inventory was at 804 thousand (7-day average), compared to 787 thousand the prior week. 

Mike Simonsen discusses this data regularly on Youtube

by Calculated Risk on 6/01/2025 06:13:00 PM

Weekend:
• Schedule for Week of June 1, 2025

Monday:
• At 10:00 AM ET, ISM Manufacturing Index for May. The consensus is for the ISM to be at 49.2, up from 48.7 in April.

• Also at 10:00 AM, Construction Spending for April. The consensus is for a 0.4% increase in construction spending.

• At 1:00 PM, Speech, Fed Chair Jerome Powell, Opening Remarks, At the Federal Reserve Board’s International Finance Division 75th Anniversary Conference, Washington, D.C.

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are down 20 and DOW futures are down 134 (fair value).

Oil prices were down over the last week with WTI futures at $60.79 per barrel and Brent at $62.78 per barrel. A year ago, WTI was at $78, and Brent was at $79 - so WTI oil prices are down about 22% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.10 per gallon. A year ago, prices were at $3.52 per gallon, so gasoline prices are down $0.42 year-over-year.

by Calculated Risk on 6/01/2025 08:21:00 AM

This is something to watch again. Here is another monthly update on lumber prices.

SPECIAL NOTE: The CME group discontinued the Random Length Lumber Futures contract on May 16, 2023.  I switched to a physically-delivered Lumber Futures contract that was started in August 2022.  Unfortunately, this impacts long term price comparisons since the new contract was priced about 24% higher than the old random length contract for the period when both contracts were available.

This graph shows CME random length framing futures through August 2022 (blue), and the new physically-delivered Lumber Futures (LBR) contract starting in August 2022 (Red).

On May 30, 2025, LBR was at $593.00 per 1,000 board feet, up 17% from a year ago.

Click on graph for larger image.

There is somewhat of a seasonal demand for lumber, and lumber prices frequently peak in the first half of the year.

Last year, prices bottomed in July at $449.00 per 1,000 board feet.

Note that the pickup in early 2018 was due to the Trump lumber tariffs in 2017.  There were huge increases during the pandemic due to a combination of supply constraints and a pickup in housing starts.

The recent year-over-year increase might be due to the tariffs.  

by Calculated Risk on 5/31/2025 02:11:00 PM

At the Calculated Risk Real Estate Newsletter this week:

Click on graph for larger image.

• Case-Shiller: National House Price Index Up 3.4% year-over-year in March

• Inflation Adjusted House Prices 1.0% Below 2022 Peak

• Freddie Mac House Price Index Declined in April; Up 2.6% Year-over-year

• Final Look at Local Housing Markets in April and a Look Ahead to May Sales

This is usually published 4 to 6 times a week and provides more in-depth analysis of the housing market.

by Calculated Risk on 5/31/2025 08:11:00 AM

The key report scheduled for this week is the May employment report.

Other key reports include the May ISM Manufacturing, Vehicle Sales and April trade balance.

----- Monday, June 2nd -----
10:00 AM: ISM Manufacturing Index for May. The consensus is for the ISM to be at 49.2, up from 48.7 in April.

10:00 AM: Construction Spending for April. The consensus is for a 0.4% increase in construction spending.

1:00 PM: Speech, Fed Chair Jerome Powell, Opening Remarks, At the Federal Reserve Board’s International Finance Division 75th Anniversary Conference, Washington, D.C.

----- Tuesday, June 3rd -----
10:00 AM ET: Job Openings and Labor Turnover Survey for April from the BLS.

This graph shows job openings (black line), hires (purple), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS.

Jobs openings decreased in March to 7.19 million from 7.48 million in February. The number of job openings (black) were down 11% year-over-year.

Quits were unchanged year-over-year.

Late: Light vehicle sales for May.

The consensus is for light vehicle sales to be 16.4 million SAAR in May, down from 17.3 million in April (Seasonally Adjusted Annual Rate).

This graph shows light vehicle sales since the BEA started keeping data in 1967. The dashed line is the sales rate for last month.

----- Wednesday, June 4th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:15 AM: The ADP Employment Report for May. This report is for private payrolls only (no government). The consensus is for 120,000 payroll jobs added in May, up from 62,000 in April.

10:00 AM: the ISM Services Index for May.   The consensus is for a reading of 52.0, up from 51.6.

----- Thursday, June 5th -----
8:30 AM: Trade Balance report for April from the Census Bureau.

This graph shows the U.S. trade deficit, with and without petroleum. 

The blue line is the total deficit, and the black line is the petroleum surplus, and the red line is the trade deficit ex-petroleum products.

The consensus is the trade deficit to be $117.3 billion.  The U.S. trade deficit was at $140.5 Billion in March.

8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for initial claims of 230 thousand, down from 240 thousand last week.

----- Friday, June 6th -----
8:30 AM: Employment Report for May.   The consensus is for 130,000 jobs added, and for the unemployment rate to be unchanged at 4.2%.

There were 177,000 jobs added in April, and the unemployment rate was at 4.2%.

This graph shows the jobs added per month since January 2021.

by Calculated Risk on 5/30/2025 07:39:00 PM

Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.

For deaths, I'm currently using 4 weeks ago for "now", since the most recent three weeks will be revised significantly.

Note: "Effective May 1, 2024, hospitals are no longer required to report COVID-19 hospital admissions, hospital capacity, or hospital occupancy data."  So, I'm no longer tracking hospitalizations.

COVID Metrics
	Now	Week Ago	Goal
Deaths per Week	267✅	310	≤3501
1my goals to stop weekly posts. 🚩 Increasing number weekly for Deaths. ✅ Goal met.

Click on graph for larger image.

This graph shows the weekly (columns) number of deaths reported since Jan 2020.

Although weekly deaths met the original goal to stop posting in June 2024 (previous pandemic low of 314 deaths), I've continued to post since deaths moved above the goal again - and I'll continue to post until weekly deaths are below the goal for several weeks.

And here is a graph I'm following concerning COVID in wastewater as of May 29th:

This appears to be a leading indicator for COVID hospitalizations and deaths.  This is close to the lows of May 2024.

Nationally COVID in wastewater is "Very Low".

by Calculated Risk on 5/30/2025 02:09:00 PM

From BofA:

Since our last weekly publication, our 2Q GDP tracking is down two-tenths to +1.8% q/q saar. [May 30th estimate]
emphasis added

From Goldman:

The goods trade deficit narrowed by more than expected in April, reflecting a sharp decline in goods imports and a moderate increase in goods exports. The Advance Economic Indicators report indicated a significantly larger decline in imports than our previous GDP tracking assumptions, while the details of the personal income and spending report were modestly softer than our previous assumptions. On net, we boosted our Q2 GDP tracking estimate by 1.0pp to +3.3% (quarter-over-quarter annualized). Our Q2 domestic final sales estimate stands at -0.6%. We continue to see the headline Q1 and Q2 GDP growth readings as distorted measures of economic growth because of measurement challenges related to swings in imports around tariff increases. [May 30th estimate]

And from the Atlanta Fed: GDPNow

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2025 is 3.8 percent on May 30, up from 2.2 percent on May 27. After recent releases from the US Census Bureau and the US Bureau of Economic Analysis, the nowcast of the contribution of net exports to second-quarter real GDP growth increased from -0.64 percentage points to 1.45 percentage points, while the nowcasts of second-quarter real personal consumption expenditures growth and second-quarter real gross private domestic investment growth declined from 3.7 percent and -0.2 percent, respectively, to 3.3 percent and -1.4 percent. [May 30th estimate]

by Calculated Risk on 5/30/2025 01:10:00 PM

From STR: U.S. hotel results for week ending 24 May

The U.S. hotel industry reported mixed year-over-year comparisons, according to CoStar’s latest data through 24 May. ...

18-24 May 2025 (percentage change from comparable week in 2024):

• Occupancy: 67.5% (-0.4%)
• Average daily rate (ADR): US$164.57 (+1.5%)
• Revenue per available room (RevPAR): US$111.02 (+1.1%)
emphasis added

The following graph shows the seasonal pattern for the hotel occupancy rate using the four-week average.

Click on graph for larger image.

The red line is for 2025, blue is the median, and dashed light blue is for 2024.  Dashed purple is for 2018, the record year for hotel occupancy. 

The 4-week average of the occupancy rate is tracking last year and above the median rate for the period 2000 through 2024 (Blue).

Note: Y-axis doesn't start at zero to better show the seasonal change.

The 4-week average will mostly move sideways for a couple more weeks until the summer travel season.  We will likely see a hit to occupancy during the summer months due to less international tourism.

by Calculated Risk on 5/30/2025 10:09:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Freddie Mac House Price Index Declined in April; Up 2.6% Year-over-year

A brief excerpt:

Freddie Mac reported that its “National” Home Price Index (FMHPI) decreased -0.15% month-over-month (MoM) on a seasonally adjusted (SA) basis in April. On a year-over-year basis, the National FMHPI was up 2.6% in April, down from up 2.9% YoY in March. The YoY increase peaked at 19.0% in July 2021, and for this cycle, bottomed at up 0.9% YoY in April 2023. ...

As of April, 26 states and D.C. were below their previous peaks, Seasonally Adjusted. The largest seasonally adjusted declines from the recent peaks are in D.C. (-5.3), Colorado (-2.4%), Oregon (-2.0%), Montana (-1.7%) and Florida (-1.7%).

For cities (Core-based Statistical Areas, CBSA), here are the 30 cities with the largest declines from the peak, seasonally adjusted. Austin continues to be the worst performing city. However, 4 of the 5 cities with the largest price declines are in Florida.

There is much more in the article!