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Weekly Economic Update for the Week of May 31, 2010
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Personal spending flat for April. However, wages rose 0.4% and disposable personal incomes went up 0.5% (the biggest increase in almost a year). April was the first month since September in which consumer spending didn’t increase.1,2
Home sales rise. Federal tax credits expired in April, and these numbers reflect it: the Commerce Department said new home sales were up 14.8% for the month (they were also 47.8% above April 2009 levels). The National Association of Realtors noted a 7.6% gain in existing home sales in April.3
Sentiment indexes improve. The final University of Michigan/Reuters survey for May hit 73.6, up from a 72.2 reading in late April. The Conference Board’s consumer index hit 63.3, a level unseen since September 2008.4
Durable goods orders rise 2.9%. The Commerce Department report showed transportation orders behind the April gain, which topped the 1.3% increase forecast by economists.5
Hopefully, June will be better. The poorest month for equities since November 2008 finally ended. The DJIA closed May at 10,136.63. As for the NASDAQ and S&P 500, they stood respectively at 2,257.04 and 1,089.41 as the Memorial Day weekend began (Wall Street resumes trading on Tuesday). Even after the May selloff, the Russell 2000 was +5.79% on the year through the weekend.6
| % Change | Y-T-D | 1-Yr Chg | 5-Yr Avg | 10-Yr Avg |
| DJIA | -2.79 | +20.62 | -0.77 | -0.37 |
| NASDAQ | -0.53 | +28.84 | +1.75 | -3.48 |
| S&P 500 | -2.30 | +20.13 | -1.82 | -3.06 |
| Real Yield | 5/28 | 1 Yr Ago | 5 Yrs Ago | 10 Yrs Ago |
| 10YrTIPS | 1.32% | 1.87% | 1.67% | 4.34% |
(Source: CNBC.com, BigCharts.com, ustreas.gov, bls.gov, 5/28/10)6,7,8,9
Indices are unmanaged, do not incur fees or expenses, and cannot be
invested into directly. These returns do not include dividends.
Citations.
1 -bea.gov/newsreleases/national/pi/pinewsrelease.htm [5/28/10]
2 - investmentadvisor.com/news/2010/5/Pages/Consumer-spending-flat-personal-income-rises-04-sentiment-inches-up.aspx [5/28/10]
3 - online.wsj.com/article/SB10001424052748704717004575268173355581314.html [5/28/10]
4 - thestreet.com/story/10769732/1/consumer-sentiment-holds-steady.html [5/28/10]
5 - forbes.com/2010/05/26/durable-goods-manufacturing-markets-economy-transportation.html [5/26/10]
6 - cnbc.com/id/37396837 [5/28/10]
7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=5%2F28%2F09&x=0&y=0 [5/28/10]
7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=5%2F28%2F09&x=0&y=0 [5/28/10]
7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=5%2F28%2F09&x=0&y=0 [5/28/10]
7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=5%2F27%2F05&x=0&y=0 [5/28/10]
7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=5%2F27%2F05&x=0&y=0 [5/28/10]
7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=5%2F27%2F05&x=0&y=0 [5/28/10]
7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=5%2F30%2F00&x=0&y=0 [5/28/10]
7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=5%2F30%2F00&x=0&y=0 [5/28/10]
7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=5%2F30%2F00&x=0&y=0 [5/28/10]
8 - ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [5/28/10]
8 - ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [5/28/10]
9 - treasurydirect.gov/instit/annceresult/press/preanre/2000/ofm11200.pdf [1/12/00]
