EconUpdate by P. Duffy
Construction spending edges up 0.2 percent in March, rises 5.3 percent year-on-year
What does this mean? The year-on-year increase was driven entirely by residential spending, up over 23 percent.
Construction spending during March 2021 was estimated at a seasonally adjusted annual rate of $1,513.1 billion, up 0.2 percent from February and rising 5.3 percent year-on-year. During the first three months of this year, construction spending amounted to $328.3 billion, 4.5 percent above the $314.1 billion for the same period in 2020.
April manufacturing sector index drops 4 points to 60.7 as supply chain difficulties continue
What does this mean? Despite the supply chain challenges and rising input prices, the manufacturing sector continues to grow.
The April Manufacturing PMI® registered 60.7 percent, a decrease of 4 percentage points from the March reading of 64.7 percent. This figure indicates expansion in the overall economy for the 11th month in a row after contraction in April 2020. Recent record-long lead times, wide-scale shortages of critical basic materials, rising commodities prices and difficulties in transporting products are continuing to affect all segments of the manufacturing economy.
Personal incomes soar in March due to stimulus, while personal spending rose 4.2 percent
What does this mean? Although consumer spending is rising quickly, consumers are continuing to be somewhat cautious.
Disposable personal incomes rose by nearly 24 percent during March, but much of that — 27.6 percent — was saved. In comparison, personal spending rose by 4.2 percent, certainly a big jump from the decline of 1.0 percent in February, but it also indicates some measure of caution among consumers receiving those payments.
Inflation tracker PCE Price Index up 0.5 percent in March and 2.3 percent year-on-year
What does this mean? Strong demand from consumers is putting pressure on prices, which the Fed thinks is temporary.
The PCE Price Index, which the Federal Reserve prefers over the CPI or the PPI to gauge inflation risks, rose 0.5% in March, more than double the previous month’s rise. Year-on-year, the index rose 2.3%, a sharp jump from 1.5% in February. Since food and energy prices can be volatile, a ‘core’ index which subtracts out those categories rose 0.4% in March (up from 0.1% in February) and was up 1.8% year-on-year.