In June, the NY empire state manufacturing index dropped from -4.55 to -9.41, while the consensus was looking for only a marginal decline (-4.6). Looking at the details, the deterioration was driven by a drop in shipments (-4.84 from 1.29) and inventories (-25.29 from -21.59). New orders (-8.15 from -9.01), number of employees (-21.84 from -23.86), average workweek (-21.84 from -22.73) and delivery time (- 10.34 from -13.64) on the contrary improved. The unfilled orders sub-index stayed broadly unchanged (-10.34 from -10.23). Both prices paid (-5.75 from -11.36) and prices received (-12.64 from -27.27) rose significantly, indicating that deflationary pressures are easing. The slight deterioration is no surprise after the sharp increases in the two previous months.
The NAHB housing market index showed an unexpected deterioration in June. The headline index dropped from 16 to 15, while an outcome of 17 was expected. The details show that deterioration was concentrated in the expected sales index, which dropped from 27 to 26. The NAHB added that homebuilders are facing headwinds from higher mortgage rates, the expiration of the tax credit and a continuing lack of credit for housing production loans.
EMU: employment drops by 0.8% Q/Q in first quarter
The number of people employed in the euro zone dropped by 0.8% Q/Q in the first quarter, the third consecutive contraction in employment in the euro area. On a yearly basis, employment dropped by 1.2% Y/Y, the largest decline since the start of the series in 1991. Spain suffered the largest drop in employment (-3.1% Q/Q) from the 16 countries that use the euro. In the coming months, employment is forecasted to drop further.
