Tom Moeller

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The Autodata Corporation reported that U.S. light vehicle sales rose 2.8% (1.5% y/y) to 16.00 million units (SAAR) in April after falling 1.9% to 15.56 million in March. Sales averaged 15.43 million in Q1.

Sales of light trucks rose 2.9% (3.4% y/y) during April to 12.9 million units (SAAR) after falling 1.3% in March. Purchases of domestically-made light trucks edged 0.5% higher to 9.68 million units (unchanged y/y), after falling 2.5% in March. Sales of imported light trucks strengthened 10.7% (15.0% y/y) to 3.22 million units, the highest level in three years,  after a 3.6% March increase.

Trucks' share of the light vehicle market held steady at a record 80.6% last month compared to 79.1% in April of last year.

Auto sales rose 1.3% (-5.8% y/y) to 3.10 million units (SAAR) in April following a 2.9% March decline. Purchases of domestically-produced cars improved 2.8% (-7.2% y/y) last month to 2.19 million units after falling 3.6% in March. Sales of imported autos weakened 2.2% both m/m and y/y to 0.91 million units after easing 1.1% in March.

Imports' share of the U.S. light vehicle market rose to 25.8% in April from 24.7% in March, up versus a May 2023 low of 22.3%. Imports' share of the passenger car market declined to 29.4% from 30.4% in March. It reached a high of 37.9% in September 2021. Imports' share of the light truck market improved to 25.0%, a five-month high, from 23.2% in March.

U.S. vehicle sales figures can be found in Haver's **USECON** database. Additional detail by manufacturer is in the **INDUSTRY** database.

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- Light truck sales improve considerably while passenger car sales edge higher.
- Imports' market share gains ground.

U.S. Light Vehicle Sales Move Up in April

Winnie Tapasanun

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The ISM U.S. manufacturing PMI fell to 49.2 in April after rising to 50.3 in March, according to the Institute for Supply Management. The April manufacturing PMI, below the 50 expansion-contraction dividing line, indicated that the U.S. manufacturing sector contracted for the 17th time in 18 months. While slightly higher than 47.0 in April 2023 and a low of 46.5 in March 2023, the April reading remained below a peak of 64.0 in March 2021. A reading of 50.0 had been expected in the Action Economics Forecast Survey for April.

The production index declined to 51.3 in April from 54.6 in March, suggesting production expanded for the third time in four months but at a slower pace compared to March; it was below a high of 66.8 in March 2021. A 22.1% (NSA) of respondents reported higher production in April while 15.3% reported lower. The employment index increased to 48.6 in April from 47.4 in March, indicating employment contracted for the seventh successive month but at a slightly less severe pace. The index remained down from a high of 57.7 in March 2021. An increased 16.3% (NSA) of respondents reported higher employment in April while 15.8% reported less hiring.

The new orders index dropped to 49.1 in April after increasing to 51.4 in March, indicating new orders contracted for the second time in three months to the lowest level since December. It was up from a low of 42.8 in January 2023 but below a high of 61.3 in February 2022. A 19.9% (NSA) of respondents reported higher new orders in April while 16.9% reported a decline. The inventories index was at 48.2 in April and March after 45.3 in February, showing inventories contracted for the 15th consecutive month. The index remained down from a high of 56.5 in July 2022. Meanwhile, the supplier deliveries index was at 48.9 in April, compared to 49.9 in March and 50.1 in February, indicating the delivery performance of suppliers to manufacturing organization was slightly faster for the second successive month. An 8.1% (NSA) of respondents reported slower delivery speeds in April while an increased 10.3% reported faster speeds.

Inflation has remained sticky. The prices paid index jumped to 60.9 (NSA) in April after rising to 55.8 in March, indicating raw materials prices rose for the fourth straight month to the highest reading since June 2022. The April index was well above a low of 39.4 in December 2022 but meaningfully below a high of 87.1 in March 2022 and a peak of 92.1 in June 2021. An increased 30.8% (NSA) of respondents reported higher prices in April while only 9.1% reported price declines.

In other ISM series not included in the composite index, the new export orders index dropped to 48.7 in April after registering at 51.6 in March and February, indicating new export orders contracted for the first time in three months. It was down from a high of 57.1 in February 2022. The imports index fell to 51.9 in April from 53.0 in March and February, remaining at an expansion level for the fourth consecutive month; it was down from a high of 61.0 in June 2021. The order backlog index decreased to 45.4 (NSA) in April from 46.3 in March and February, indicating falling backlog levels for the 19th straight month. It was up from a low of 37.5 in May 2023 but down from a high of 70.6 in May 2021.

The ISM figures are based on responses from over 400 purchasing executives from 20 industries, which correspond to their contribution to GDP in 50 states. These data are diffusion indexes where a reading above 50 indicates expansion. The figures from the Institute for Supply Management can be found in Haver's **USECON** database; further detail is found in the **SURVEYS** database. The expectations number is available in Haver's **AS1REPNA** database.

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- 49.2 in April vs. 50.3 in March, lower than expected.
- Production expands for the third month in four.
- Employment contracts for the seventh straight month.
- New orders contract to a four-month low after March’s expansion.
- Amid ongoing inflationary pressures, prices index rises to 60.9, the highest since June ’22.

U.S. ISM Manufacturing PMI Contracts in April, w/ Prices Highest Since June ’22

Carol Stone, CBE

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Job openings decreased 325,000 in March to 8.488 million after rising 65,000 in February, revised from 8,000 reported before, according to the Job Openings and Labor Turnover Survey conducted by the Bureau of Labor Statistics. The March amount is down -11.8% from 9.623 million a year ago, that is, March 2023, and down even more from 12.182 million in March 2022. The job openings rate, that is, the number of job openings as a percent of employment plus job openings on the last business day of the month, was 5.1% this March, down from 5.3% the prior month.

Private sector job openings fell 364,000 this March, following a 9,000 decline in February. The private sector rate was 5.3%, down from February’s 5.5%. The biggest change in private sector job openings was a 182,000 drop in construction; the rate in that industry fell from 5.3% in February to 3.2% in March. Another sizable decline was in finance and insurance, where opening fell 158,000 in March, and the rate dropped to 5.0% from 7.1% in February. Retail trade saw a 64,000 decrease in openings and a fall in the rate from 3.7% to 3.3%.  Industries with positive moves include the information sector, +43,000 openings in March and a rate change from 4.0% to 5.3%. The state and local education sector saw an increase in openings of 68,000 in March, with the associated rate moving to 2.9% from 2.3% the prior month.

Hiring showed widespread declines across industries with total hirings down 281,000 in March, making a rate of 3.5%, down from February’s 3.7%. The rates here are the amount of hiring during the entire month as a percent of total employment. Construction also saw a hiring decline, 59,000, with its rate moving down to 4.1% from 4.9% in February. Transportation, warehousing and utilities saw a 50,000 decrease in March’s hiring, and a decline in the rate to 3.4% from 4.1%. There were just a few increases, notably in private educational services, +10,000 in March and a move in the rate from 2.1% to 2.4%. Another notable increase took place in durable goods manufacturing, 6,000 in March, although this was not large enough to raise the rate in that industry, which stayed flat at 2.2%.

Layoffs actually fell in March by 155,000; the associated rate, that is, layoffs during the whole month as a percent of total employment, was 1.0%, down from 1.1% in February. These decreases in layoffs were spread across numerous industries; interestingly the most sizable decrease was in construction, 63,000, following an increase in that industry’s layoffs in February of 21,000. The March layoff rate in construction was 1.8% in March, down from 2.5% in February. The highest layoff rate among industries was 3.5% in arts, entertainment and recreation, and this was down from 5.0% in February.

The Job Openings and Labor Turnover Survey (JOLTS) data are available in Haver’s **USECON** database.

- Job openings rise in just a few industries in March.
- Hiring declined among many industries in March.
- Construction job openings fell in March, but so did construction industry layoffs.

U.S. Job Openings Fell in March, but So Did Layoffs

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The ADP National Employment Report indicated that nonfarm private sector payrolls rose 192,000 during April following a 208,000 March increase, revised from 184,000, and a 176,000 February gain, revised from 155,000. The 1.8% y/y gain compares with 1.9% increase last year but remained below 3.1% growth in 2022. A 193,000 rise in April ADP employment had been expected in the Action Economics Forecast Survey.

Small business hiring (less than 50 employees) increased 38,000 (1.4% y/y) last month after rising 7,000 in March. Employment at medium-sized firms (50-499,000 employees) rose 62,000 (2.4% y/y) after a 118,000 March increase. Large business hiring (500+ employees) rose 98,000 (1.6% y/y) during April following a 78,000 March rise.

Goods-producing employment rose 47,000 last month (1.6% y/y) after a 45,000 March rise. The number of construction sector jobs rose 35,000 (4.2% y/y) following a 34,000 March increase. Hiring in the manufacturing sector edged 9,000 higher (-0.4% y/y) last month after a 3,000 March gain. Natural resource & mining hiring rose 3,000 (5.0% y/y) after an 8,000 increase.

Service-producing jobs rose 145,000 (1.9% y/y) in April following a 163,000 March gain. Leisure & hospitality employment rose 56,000 (4.3% y/y) and education jobs gained 26,000 (2.7% y/y). The number of trade, transportation & utilities jobs increased 26,000 (0.9% y/y). Professional & business services employment rose 22,000 (0.6% y/y) but information employment fell 4,000 (-1.2% y/y).

Growth in median annual pay for "job stayers" eased to 5.0% y/y in April from 5.1% in March, remaining well below a September 2022 high of 7.8% y/y. Pay increases in manufacturing averaged 4.6% y/y while leisure & hospitality rose 5.8% y/y. Pay increases for “job changers” strengthened 9.3% y/y last month, up from a 7.3% y/y low in January, but remained below the 16.4% y/y peak in June 2022.

The ADP National Employment Report and Pay Insights data can be found in Haver's **USECON** database. Historical figures date back to January 2010 for private employment. Pay data date back to October 2020. The expectation figure is available in Haver's **AS1REPNA** database.

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- Job increase is nearly the strongest since July 2023.
- Service-sector and construction sector employment are strong.
- Pace of wage growth steadies y/y.

ADP Employment & Pay Growth Remain Firm in April

Kathleen Stephansen, CBE

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Mortgage applications fell 2.3% (-10.4% y/y) in the week ended April 26 after a 2.7% (-9.3% y/y) decline in the week ended April 19. Home purchase loans declined 1.7% (-14.5% y/y) following a decline of 1.0% (-14.7% y/y) in the prior week. Applications to refinance a loan declined 3.3% (-0.9% y/y) after a decline of 5.6% (+3.3% y/y) the prior week. These data are from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.

The effective interest rate on a 30-year fixed-rate loan rose 5bps to 7.48% in the week ended April 26, from 7.43% in the prior week. It compared to a high of 8.12% in mid-October of last year and a low of 6.87% in the fourth week of December. The rate on 15-year fixed-rate mortgages edged down 1bps to 6.90% in the latest week from 6.91% in the week prior. The rate on 30-year Jumbo loans declined 9bps to 7.53% last week from 7.62% in the week prior, while the rate on the 5-year ARM eased 8bps to 6.88% in the latest week from 6.96%. These latter rates remain below the 7.31% high in the last week of October but above the recent low of 5.93% in the last week of December.

The share of applications for refinancing an existing loan declined to 30.2% in the week ended April 26 from 30.8% in the prior week. That compared to a high of 39.7% in mid-December. The percentage of applications that were ARMs rose to 7.8% from 7.6%. The recent low of 5.4% was reached in early-January.

The average loan size fell 1.0% (-3.9% y/y) to $378,200 in the week ended April 26 from $381,900 in the prior week. The average size of a purchase loan declined 0.4% (-1.2% y/y) to $436,000 in the latest week from $437,900 in the prior week. The average loan size to refinance a mortgage fell 4.4% (-8.1% y/y) to $244,600 from $255,800 in the prior week.

The Mortgage Bankers Association Survey covers 75% of all U.S. retail residential mortgage applications and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. The base period and value for all indexes is March 16, 1990=100. The figures for weekly mortgage applications and interest rates are available in Haver’s **SURVEYS** database.

- Mortgage applications fell for the second consecutive week.
- Purchase applications & refinancing applications both fell.
- The effective interest rate on a 30-year fixed-rate loan rose, while other rates edged down.

U.S. Mortgage Applications Decreased for a Second Week

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The Conference Board's Index of Consumer Confidence declined 5.9% (-6.5% y/y) to 97.0 during April following a 1.6% March drop, revised from a 0.1% slip. A reading of 104.0 had been expected in the Action Economics Forecast Survey. These declines came after a 5.5% February fall and a 2.7% January rise. The latest level remains well below the high of 137.9 in October 2018.

The Present Situations Index fell 2.7% (-5.9% y/y) this month to 142.9 following a 0.5% March slip and February’s 4.7% decline. The Expectations Index fell 10.3% (-7.4% y/y) to 66.4, the lowest point since July 2022, after falling 3.0% in March and 6.4% in February.

An improved 20.6% of respondents characterized current business conditions as good in April, remaining below its high of 23.4% in June. Labor market readings deteriorated this month. The jobs gap, representing the difference between respondents indicating that jobs are plentiful and those saying jobs are hard to get, fell to 25.3% from 29.5% in March. The reading remained below the March 2022 high of 47.1%. Calculated by Haver Analytics, this series has a 64% correlation with the unemployment rate over the last ten years. The jobs plentiful measure fell to 40.2% from 41.7% and remained below the March 2022 high of 56.7%. The jobs hard-to-get measure of 14.9% compared to 12.2% in March and a recent high of 15.6% in October. The jobs not-so-plentiful reading fell to 44.9% from 46.1% in March and remained well above its 30.5% low in September 2021.

In April, a greatly lessened 12.8% of consumers believed that business conditions in six months would improve and a higher percentage of 19.9% believed they would worsen. A lessened 11.7% of respondents felt there would be more jobs in six months, down from a high of 41.2% in April 2020. This remains below a recent high of 20.0% in December of 2022. A lessened 15.4% expected income to increase in six months, down from 18.3% in December and below a high of 19.6% in October of 2022.

The expected inflation rate in twelve months of 5.3% compared to 5.3% in March. It remained below the 7.9% high in June 2022, but above the 4.4% low in January 2020.

A steady 53.8% of respondents felt that interest rates would be higher in twelve months, up from a low of 42.1% in January. A diminished 20.5% thought they would be lower. A lessened 46.3% of respondents believed that stock prices would be higher in twelve months. Roughly 27% thought stock prices would be lower in twelve months versus a high of 44.7% in July of 2022. The share of respondents planning to buy a home within six months declined to 4.9% from 5.2% and remained below the October 2022 high of 7.4%. The percentage of respondents planning to buy a major appliance fell sharply m/m to 41.2% and remained below a high of 52.4% in October 2022.

The Consumer Confidence data are available in Haver's **CBDB** database. The total indexes, which are indexed to 1985=100, appear in **USECON**, and market expectations are in **AS1REPNA**.

**How Do Households Respond to Income Shocks?** from the Federal Reserve Bank of Minneapolis is available [here](https://www.minneapolisfed.org/article/2024/wealth-moves-dramatically-with-income-shocks-with-implications-for-policy-and-theory).

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- Decline moves to roughly two-year low.
- Present situations and expected conditions decline.
- Inflation expectations remain steady.

U.S. Consumer Confidence Diminishes Greatly in April

Sandy Batten

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The MNI Chicago Business Barometer fell for the fifth consecutive month, to 37.9 in April, its second lowest reading since the pandemic and well below the critical 50 level that separates expansion from contraction. The Action Economics Forecast Survey had looked for the index to increase to 45.0 in April.

Haver Analytics calculates an ISM-adjusted version of this index that gives equal weights to each of the five key component subindexes. The headline index includes the same subindexes but with varying weights. This ISM-adjusted index fell to 41.0 in April, equaling the lowest reading in 15 years, from 44.0 in March. This index has been pointing to weak activity for quite a while, having been above the critical 50 level in only one month since August 2022.

All the subindexes remained below the critical 50 level in April with four of the five declining from March. Only the inventories subindex increased, rising to 45.8 from 39.5 in March. The production subindex declined 6.9 points to 35.5, its lowest reading since November 2022, with 14% of respondents reporting an increase and 35% reporting a decrease. The new orders subindex fell 5.1 points to 37.9, its lowest reading since November 2022, with 40% of respondents reporting a decline in orders. After having risen in March, the employment index fell 8.5 points to 38.6 in April, its lowest reading since February 2023. Twenty-eight percent of respondents reported a decline in employment while only 9% reported an increase. And the supplier deliveries subindex slipped 0.8 point to 47.3 in April, its third consecutive month below 50, indicating that delivery times are shortening.

Input prices continued to rise in April with the increase picking up pace. The index increased 6.7 points to 69.3, its highest reading since August 2023. Forty-seven percent of respondents reported paying higher prices in April vs. 35% in March while only 3% reported paying lower prices in April.

The Chicago Business Barometer is considered to be a leading indicator of the U.S. economy. A reading above 50 indicates expansion while one below 50 suggests contraction. Summary data are contained in Haver’s **USECON** database with detail including the ISM-style index in the **SURVEYS** database. The expectations figure from the Action Economics Forecast Survey is in the **AS1REPNA** database.

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- Index falls to the second lowest level since the pandemic and moved deeper into contraction territory.
- All component indexes remained below 50.
- The prices paid index rose to highest level since August 2023.

Chicago Business Barometer Unexpectedly Falls Again in April

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U.S. house prices rose 1.2% m/m in February following a 0.1% easing in January (unrevised) and a 0.2% increase in December (+0.1% previously), according to the Federal Housing Finance Agency (FHFA) House Price Index. The February reading was the 17th m/m gain in 18 months and the largest since April 2022. The February HPI at 423.00 was 50.0% above a low of 281.93 in May 2020. The year-on-year rate of increase accelerated to 7.0% in February, the highest since November 2022, after easing to 6.5% in January; it was up from 4.6% in February 2023 but down from a high of 18.9% in February 2022.

The month-on-month increases in house prices were evident in February (vs. January) in all of the nine census divisions. These included New England (3.0% vs. 0.2%), Middle Atlantic (2.6% vs. -0.3%), South Atlantic (1.4% vs. -0.8%), Pacific (1.3% vs. -0.02%), East South Central (1.2% vs. -1.0%), West North Central (1.1% vs. 1.5%), East North Central (0.9% vs. -0.1%), Mountain (0.4% vs. 0.1%), and West South Central (0.4% vs. 0.7%).

Year-on-year house prices continued to gain in February, with the pace of advance accelerating (vs. January) in six of the nine census divisions. These included Middle Atlantic (10.8% vs. 8.9%), New England (10.5% vs. 8.4%), East North Central (8.9% vs. 8.6%), West North Central (7.3% vs. 7.1%), South Atlantic (7.1% vs. 6.0%), and Pacific (6.6% vs. 5.1%). Meanwhile, house price growth decelerated y/y in February (vs. January) in the following three census divisions: West South Central (3.7% vs. 4.5%), Mountain (4.4% vs. 5.2%), and East South Central (4.9% vs. 5.2%).

The FHFA house price index is a weighted purchase-only index that measures average price changes in repeat sales of the same property. An associated quarterly index includes refinancing the same kind of properties. The indexes are based on transactions involving conforming conventional mortgages purchased or securitized by Fannie Mae or Freddie Mac. Only mortgage transactions on single-family properties are included.

The FHFA data are available in Haver’s **USECON** database.

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- FHFA HPI +1.2% (+7.0% y/y) in Feb. vs. -0.1% (+6.5% y/y) in Jan.
- House prices rise m/m in nine census divisions, w/ the highest rate in New England (3.0%).
- House prices gain y/y in all of the nine regions, w/ the highest rate in Middle Atlantic (10.8%).

U.S. FHFA House Prices Rebound M/M in February, w/ the Highest Y/Y Rate Since Nov. ’22

Surging orders for computers and electronics propelling durable goods orders

Next year's inflation forecasts are on the rise and above target

Disrupted global supply chains placing upward pressure on US goods prices

Construction of data centers has overtaken transportation construction in US

Elevated energy prices putting intense upward pressure on input prices around the globe

US is big leader in global surge in private AI investment

Larger-than-usual income tax refunds this year are supporting consumer spending

Sharply rising share of AI-related jobs

Inflationary impact of surge in oil prices larger in Europe than in the US

Futures market thinks the price of oil will recede significantly over the next six months

Recent pickup in US defense orders could help support overall growth ahead

Cost of transporting crude oil has soared to series high

Market-based inflation expectations have not yet reflected recent surge in oil prices

Global equity markets are fearing a major economic disruption from soaring oil prices

Is recent drop in sentiment signaling softer growth ahead?

With the Iran conflict, geopolitical risk has soared to alarming levels

Soaring AI-related investment in US underpinning strong contribution of business spending to overall growth

AI-related outperformance of IP in Advanced Asia ex Japan

Resilient US economy pushing up Blue Chip 2026 outlook

US and China big leaders in adoption of AI models

Robust US demand for advanced technology products

China's export growth rotating away from the US

More pronounced upward revisions in countries more exposed to AI investment

Stable job openings and hiring rates point to cautious hiring

Global freight costs are on the rise while supply chain pressures are contained

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The ISM U.S. manufacturing PMI fell to a lower-than-expected 53.3 in June, the first m/m fall since February, following a 1.3-point increase to 54.0 in May, according to data from the Institute for Supply Management. The June reading, above the 50 expansion-contraction threshold, indicated the U.S. manufacturing sector expanded for the sixth straight month, albeit at a slightly slower pace. A reading of 53.8 for June had been expected in the Action Economics Forecast Survey. The June manufacturing PMI, while above a contraction-level 49.0 in June 2025 and a low of 47.0 in October 2024, remained below a peak of 63.8 in March 2021.

The production index declined to 52.2 in June from 54.3 in May, indicating production expanded for the eighth consecutive month but at the slowest pace since December. The index was above a low of 44.8 in April 2025 but below a peak of 66.5 in March 2021. In June, 19.0% (NSA) of respondents reported higher production while 13.0% reported lower production. The new orders index slipped to 56.0 in June from 56.8 in May, signaling new orders grew for the sixth straight month following four successive months of contraction. The index remained well above a low of 41.8 in January 2023 but below a high of 67.0 in May 2021. In June, 22.3% (NSA) of respondents reported higher new orders while 13.4% reported declines. The inventories index climbed to 51.4 in June from 49.9 in May, marking the first expansion since April 2025. The index was slightly below a high of 52.7 in March 2025 but above a low of 43.8 in October 2024. Meanwhile, the supplier deliveries index fell to 57.4 in June from 60.6 in May and April, indicating slowing delivery performance for the seventh consecutive month after faster deliveries in November. In June, 18.1% (NSA) of respondents reported slower delivery speeds while 3.4% reported faster speeds.

On the labor front, the employment index improved to 49.7 in June from 48.6 in May, showing employment contracted for the 33rd straight month but at the slowest contraction pace since January 2025. The index was above a low of 44.1 in November 2025 but below a high of 56.5 in March 2022. In June, 16.2% (NSA) of respondents reported higher employment while 13.8% reported lower hiring.

On the pricing front, the prices paid index fell to a still-high 73.0 (NSA) in June, a 9.1-point drop—the largest decline since July 2022—from 82.1 in May, indicating raw materials prices rose for the 21st straight month but at the slowest rising pace since February. The index remained well above a low of 39.4 in December 2022 but below a high of 87.1 in March 2022 and a peak of 92.1 in June 2021. In June, 55.1% (NSA) of respondents reported higher prices while 9.2% reported price declines.

In other ISM series not included in the composite index, the new export orders index fell to 48.5 in June from 50.6 in May, indicating new export orders contracted for the third time in four months. The index was up from a low of 40.1 in May 2025 but down from a high of 52.4 in January 2025 and a peak of 57.1 in February 2022. The imports index edged down to 52.9 in June from 53.0 in May, suggesting imports expanded for the fifth successive month. The index was below its recent high of 54.9 in February but above a low of 39.9 in May 2025. The order backlog index decreased to 50.5 (NSA) in June from 52.2 in May, showing backlog levels grew at the slowest pace in six months. The index was below a high of 56.6 in February and a peak of 70.6 in May 2021 but well above a low of 37.5 in May 2023.

The ISM figures are based on responses from over 400 purchasing and supply executives from 18 industries, which are weighted according to each industry’s contribution to GDP. These data are diffusion indexes where a reading above 50 indicates expansion; below 50 indicates contraction. The ISM Manufacturing PMI is a composite index based on the diffusion indexes of five of the indexes (seasonally adjusted) with equal weights: New Orders, Production, Employment, Supplier Deliveries, and Inventories. The figures from the Institute for Supply Management can be found in Haver’s **USECON** database; further detail is found in the **SURVEYS** database. The expectations number is available in Haver’s **AS1REPNA** database.

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- ISM Mfg. PMI down slightly to 53.3 in June; sixth straight month above 50.
- Production (52.2) expands for the eighth consecutive mth.; new orders (56.0) for the sixth successive mth.
- Employment (49.7) contracts for the 33rd straight mth.; at the slowest contraction pace since Jan. ’25.
- Prices Index (73.0) at a four-month low, still indicating prices rising for the 21st consecutive mth.
- Exports (48.5) contract for the third time in four mths.; imports (52.9) continue to grow.

U.S. ISM Manufacturing PMI Still Expansionary in June; New Orders and Production Growing at a Slower Pace; Employment Contracting

Michael J. Moran

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The monthly report on construction activity receives scant attention in the financial press, and investors and traders in financial markets typically pay little heed. However, it is a valuable report for economists, as it provides a broad-based view of building activity, covering private residential and business construction, as well as government-related activity. The figures feed into the calculation of GDP. Unfortunately, results have been soft since early 2025.

Total construction activity rose 0.1 percent in May, marking the third consecutive increase. However, the gains have not been especially large, averaging 0.3%, and they have barely dented the string of weak readings in the preceding 17 months. The year-over-year change in May totaled -1.5%.

Private residential construction, the largest component of the total (41% share), rose 0.3% in May, adding to an average gain of 1.1% in the prior two months and leaving a year-over-year increase of 1.8% (chart, upper left). Most of the advance in the past year was the result of improvements to existing homes (up 8.1%). Construction of new multi-family units has shown little net change in the past year or so, while new single-family building has traced a mild downward trend (off 4.0% in the past year). Public construction has been flat in the past year, with both the federal government and state and local governments showing little net change (chart, upper right).

Private nonresidential construction (34% of the total) has received considerable press attention in the past few years because of explosive growth in the building of data centers. Growth has indeed been vigorous. Building started in 2020 and grew moderately at first, but this sector took off in 2022, about the time when artificial intelligence models became publicly available (chart, lower left, in levels to show the strong trend more clearly). Average annual growth for the three years ended 2025 totaled 48%.

Interestingly, despite the rapid growth in the building of data centers, the private nonresidential sector has been the weakest area of the construction report, with activity trending lower since early 2025 (chart, lower right). Some components of private nonresidential construction have held steady or improved (e.g. amusement & recreation, electric power), but three areas stand out on the soft side: general office, commercial, and manufacturing.

The construction figures can be found in Haver's **USECON** database. The expectations figure is from the Action Economics Forecast Survey in **AS1REPNA**.

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- Building activity in the US was firm in 2023 and 2024, but it has lost ground since then.
- Government-related construction and private residential building have been little changed in the past year or so.
- Private nonresidential construction has been notably weak, despite robust activity in the building of data centers.

Construction in May: Another Soft Reading

Robert Brusca

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The manufacturing PMI values for June showed more worsening than improving, with 10 of 18 reporters showing conditions unchanged or getting worse on a month-to-month basis. However, taking into account the size of the changes across the various reporters, the median PMI rating for manufacturing in June improved to 51.4, an increase of 0.5 points from the month before. The month-to-month deterioration is relatively broad; however, it's also relatively mixed, and when taking the size of the changes into account, there's actually a monthly improvement.

The chart shows that manufacturing has been undergoing improvements generally since late last year, although in the last few months, there has been a topping, a capping, and in some cases a backtracking from the recent high readings. That action reflects the onset of hostilities between the United States and Iran and the on-again, off-again situation with the Strait of Hormuz being open or closed.

Over three months compared to six months ago, the average readings show deterioration in only 5 of 18 reporters. This clearly reflects what we see in the chart, which is a recent improvement over three months compared to six months. The next comparison of 6-month averages to 12-month averages finds that only four reporters are worse off over six months than they were over 12 months. Those four are Mexico, India, Indonesia, and Vietnam. Over 12 months compared to 12 months ago, conditions are better everywhere except in India.

In addition, we can evaluate the manufacturing performance by ranking the current month's observation in a queue of data back to January 2022, a period of about 4½ years. Viewed over that span, only four countries have readings in June below their period medians. Those are Indonesia, India, Turkey, and Russia. All the rest have readings above the 50th percentile, putting them above their historic medians. Japan has an exceptionally strong reading in June relative to its history, posting a 95.4 percentile standing. Mexico, China, Malaysia, and Taiwan also post strong standings, in their 80th percentile.

The median queue standing for the entire group is a 69.2 percentile standing, which is still quite strong. Other summary measures of sequential diffusion show that the proportion of reporters improving over 12 months is 94.4%, compared to 72.2% over 6 months and 61.1% over 3 months. The breadth of this improvement is shrinking over the near-term horizons; however, the tendency for improvement is unmistakable.

Average readings for certain groups at the bottom of the table show that the United States, the United Kingdom, EMU countries, Canada, and Japan, on an unweighted basis, have steady improvements in place from 12 months to six months to three months, with a one-month reading even stronger. The BRIC countries have readings that are marginally stronger but are staying in a tight low range around 50.8 to 51.5. The Asian average shows an improvement from 12 months to 6 months and then backtracking, with the current 3-month diffusion values just slightly above 51, around 51.5.

The global economy has shown some significant improvement recently in the manufacturing sector, and this has occurred despite the ongoing war in Ukraine and stepped-up hostilities involving Iran, including the on-again, off-again closure of the Strait of Hormuz. Oil prices have spiked and have since come down substantially. However, the outlook for peace remains clouded as both sides continue to talk positively about an agreement and a ceasefire, then turn around and violate near-term conditions they have set. This makes it very difficult to handicap the future.

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Mixed but Broad Backtrack in Global Manufacturing in June 

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The Conference Board U.S. Consumer Confidence Index rose 0.7% m/m (-4.2% y/y) to a lower-than-expected 91.2 in June, the fourth monthly rise in five months, after a downwardly revised 3.4% decline to a four-month-low 90.6 in May (-0.7%; 93.1 initially). A reading of 94.3 had been expected in the Action Economics Forecast Survey. The June reading was 6.4% above a low of 85.7 in April 2025 but down from 95.2 in June 2025 and 19.1% below a high of 112.8 in November 2024.

Consumers' views of present economic conditions weakened for the second consecutive month in June, while the views of future economic conditions improved m/m. The Present Situation Index—which assesses current business and labor market conditions—fell 2.5% m/m (-12.5% y/y) to 116.4 in June, the lowest level since February 2021, following a 4.0% drop to 119.4 in May and two successive m/m increases. The index was lower than 133.0 in June 2025 and 25.0% below a high of 155.3 in June 2023. The Expectations Index—which measures the short-term outlook for income, business, and labor market conditions—rose 4.2% m/m (6.4% y/y) to 74.4 this month, the highest level since December and the second increase in three months, after a 2.7% decline to 71.4 in May. The index was higher than 69.9 in June 2025, while 20.6% below a high of 93.7 in November 2024.

Labor market readings showed less optimism this month. The jobs gap—representing the difference between respondents indicating that jobs are plentiful and those saying jobs are hard to get—dropped to 2.4% in June, the lowest reading since February 2021, from 5.0% in May. Calculated by Haver Analytics, this series had an 85% correlation with the unemployment rate over the last 20 years. The jobs plentiful measure inched up to 24.9% of respondents in June from 24.8% in May (the lowest since February 2021). Perceptions of the current labor market weakened, with the jobs hard-to-get measure rising to 22.5% this month, the highest level since January 2021, from 19.8% in May.

Consumers generally viewed business conditions as slightly more favorable compared to last month. Current business conditions were perceived as good by 20.0% of respondents in June, up from 19.2% in May but below a high of 23.4% in June 2023. Expectations that business conditions would improve in six months were 19.0% of respondents, up from 18.8% in May but below a high of 24.7% in November 2024. More jobs were expected in six months by 15.2% of respondents, slightly down from 16.6% in May and below a high of 22.8% in November 2024. The percentage expecting rising income rose to 20.8% in June from 19.2% in May, the highest since February 2020 and above a low of 14.4% in February 2023.

Inflation expectations eased this month but remained elevated. The expected inflation rate in twelve months slipped to 6.0% in June, the lowest since February, after holding at 6.2% for three straight months. The latest reading was below a high of 7.0% in April 2025 but above a low of 5.0% in November 2024. In June, 61.5% of respondents expected that interest rates would rise over the next twelve months, down from 62.4% in May but up from 42.1% in January 2024.

The share of respondents planning to buy a home within six months rebounded to 6.6% in June from 6.5% in May. It was below its most recent high of 7.0% in April but above a low of 4.6% in February 2024. Those planning to buy automobiles rose to 13.3% of respondents this month from 12.6% in May; it was up from a low of 10.6% in April 2025. Meanwhile, the share of respondents planning a vacation within six months declined to 39.1%, the lowest since April 2021, from 41.4% in May.

The Consumer Confidence data are available in Haver’s **CBDB** database. The total indexes, which are indexed to 1985=100, appear in **USECON**, and market expectations are in **AS1REPNA**.

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- Headline up 0.6 pts. to 91.2 in June, below expectations; fourth m/m increase in five mths.
- Present Situation Index down 3.0 pts. to 116.4, lowest since Feb. ’21.
- Expectations Index up 3.0 pts. to 74.4, a six-month high.
- Consumers less optimistic about current business & labor market conditions; more upbeat about future business & financial conditions.
- Inflation expectations down to 6.0%, lowest since Feb., as lower oil prices in recent weeks eased consumer inflation fears.

U.S. Consumer Confidence Rebounds in June from a Four-Month Low

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Total job openings edged up 0.1% m/m (+3.9% y/y) to 7.594 million in May from a downwardly revised 7.585 million in April (previously 7.618 million), according to the Job Openings and Labor Turnover Survey. Even with only a small rise, the level of openings in May was the highest since May 2024. Accordingly, the job openings rate (the ratio of openings to nonfarm employment plus openings) was unchanged at 4.6% in May. The April and May readings for the job openings rate were the highest since November 2024. In May, the number of unemployed fell while the number of openings edged up. Consequently, the number of openings rose further above the number of unemployed for the second consecutive month, another sign that previously observed softening in labor market conditions may be reversing.

Private sector openings were essentially unchanged in May from April, edging up 2,000 (+4.3% y/y) with the private job openings rate unchanged at 4.8%. The sluggishness in private openings in May was due entirely to a 119,000 decline in private education and health care openings. However, this followed a total increase of 298,000 in March and April. Openings increased in all other major sectors, led by a 95,000 increase in openings in leisure and hospitality. Openings were up 32,000 in construction, 33,000 in manufacturing, and 37,000 in trade and transportation. Total government openings rose 7,000 in May after an upwardly revised 63,000 jump in April (previously +47,000).

Total hiring slipped 0.9% m/m (-3.0% y/y) to 5.170 million in May from an upwardly revised 5.215 million in April (previously 5.116 million). This was the third monthly decline in hiring in the past four months. The hiring rate was unchanged in May at 3.3%. Private sector hiring fell 1.6% m/m (-3.5% y/y) in May, also the third monthly decline in the past four months. The weakness in hiring in May was concentrated in trade and transportation (-56,000) and in construction (-24,000). Manufacturing posted a small decline while professional and business services, and private education and health care posted small increases. Leisure and hospitality hiring rose 15,000, the second monthly increase in the past three months. Total government hiring increased 32,000 in May.

Total separations increased 1.3% (-3.5% y/y) to 5.101 million in May from an upwardly revised 5.038 million in April (previously 4.978 million). Both quits (+22,000) and layoffs (+41,000) increased in May with no change in other separations. The separation rate in May was unchanged at 3.2%. Private separations also rose 1.3% m/m (+62,000, -2.9% y/y) in May. Private quits increased 37,000, private layoffs rose 27,000, while other private separations declined 2,000. The rise in private layoffs was concentrated in construction (+47,000), trade and transportation (+52,000), and private education and healthcare (+52,000). Layoffs declined 18,000 in manufacturing, fell 37,000 in professional and business services, and decreased 50,000 in leisure and hospitality. Even with the rise in private quits in May, they have been trending down in 2026, implying that workers are feeling less comfortable with their employment prospects and hence are choosing to remain in their current jobs.

On the whole, employers remain cautious in hiring. Furthermore, workers are sufficiently unsure of their alternative employment prospects that they are refraining from leaving their current position. Still, openings have gradually risen since the end of last year after having gradually fallen throughout 202 and once again exceed the number of unemployed.

The Job Openings and Labor Turnover Survey (JOLTS) data are available in Haver’s **USECON** database.

- Openings edged up 9,000 but to the highest level since May 2024.
- However, hiring fell 45,000 for the third monthly decline in the past four months.
- Separations rose 63,000 with increases in both quits and layoffs.

U.S. JOLTS: Openings and Hiring Little Changed in May