Manufacturers probably received more orders last month and home sales rose, a sign the US expansion is still on track, economists said before reports this week.
Factory bookings for long-lasting goods rose 0.3 percent last month after falling 3.9 percent in March, according to the median forecasts of 61 economists surveyed before a Commerce Department report due out on Thursday. Other figures may show purchases of existing and new houses also climbed.
Manufacturers may keep forging ahead as automakers crank out more cars and trucks, while housing will probably benefit from record-low mortgage rates that are making properties more affordable. Nonetheless, those industries alone will fail to spur a pickup in growth without bigger increases in employment throughout the economy that will propel consumer spending.
“The economy is growing, but it’s just not growing at an inspiring pace,” said Brian Jones, a senior US economist at Societe Generale in New York. “The production numbers look OK, the housing market looks OK, the thing we’re more concerned about is the labor market.”
A Federal Reserve report last week showed factory production rose 0.6 percent last month. About half the gain came from auto making, which jumped 3.9 percent following a 1.2 percent increase in the prior month.
Another measure of strength, the Institute for Supply Management’s manufacturing index, climbed to 54.8 last month, the highest level in almost a year, as orders picked up. Readings greater than 50 signal growth.
“There’s lots of good things going on from an industrial perspective,” Art Beattie, chief financial officer of Southern Co, the largest US power company by market value, said during a May 15 investor conference. “A lot of our chemical manufacturers are doing very well. Our steel manufacturers are near full capacity. Automotive production and the suppliers for those automotive plants are doing very well.”
Factory production helped sustain the expansion while the housing market stabilized.
Existing-home sales rose 3.1 percent to a 4.62 million annual rate, economists project a report from the National Association of Realtors will show tomorrow. On Wednesday, figures from the Commerce Department may show sales of newly built houses rose 2.1 percent to a 335,000 pace, according to the survey median.