Economic Roundup: June 07, 2010



In the News

Auto sales for May were surprisingly positive, with many manufacturers reporting double-digit growth. Such was the case for the U.S. Big Three, with Ford posting a 22 percent sales gain for the month, GM a 17 percent increase and Chrysler 33 percent.
Other notable foreign performers were Nissan with a 25 percent gain, Subaru with 35 percent, American Honda with 19 percent and Kia with 21 percent. While Toyota was suffering the continued fallout of its safety issues, it still managed a 7 percent gain. Meanwhile, European makers Volkswagen and Mercedes showed 21 and 26 percent gains, respectively, while BMW slipped 4 percent.
A major factor in May's positive performance was a healthy Memorial Day weekend, which accounts for at least half of the month's sales. Moreover, this Memorial Day holiday saw good weather nationwide, helping push sales even further.
Equally encouraging, spending on construction surged by a surprising 2.7 percent in April, the Census Bureau reported last week. Spending was estimated at a seasonally adjusted annual rate of $869.1 billion, compared to March's estimate of $845.9 billion.
April's performance beat economists' predictions of flat performance for the month, and marked the first time spending on private construction showed an increase since October 2009.
Overall, spending on private construction was at a seasonally adjusted annual rate of $565.8 billion in April, which was 2.9 percent over March's revised March estimate of $549.7 billion. April's residential construction was at a seasonally adjusted annual rate of $263 billion in April, which was a whopping 4.4 percent above March's revised estimate of $251.9 billion, marking the biggest increase in six months.
Experts chalk up the April surge to the tax credits, which closed April 30 and sparked housing construction activity. Many said they expect a lull to return to at least that segment of construction since the credits expired April 30.
Next week, watch for news on consumer credit (June 7) from the Federal Reserve; wholesale inventories (June 9), the trade balance (June 10), business inventories (June 11) and retail sales (June 11) from the Census Bureau; and the Treasury budget (June 10) from the Treasury Department.

Mark Ott

Loan Officer

W.J. Bradley Mortgage Capital Corp.

Office: 928-776-1980

Cell: 928-713-9639

Fax: 928-776-8866

NMLS: 189552

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