ISM Index, Jobless Claims

Each day the Research staff takes a look at recently released economic indicators, addressing what these indicators mean for REALTORS® and their clients. Today’s update discusses jobless claims and the ISM Index.

• Manufacturing activity continues to expand, though at a slower speed than before.  The latest ISM index, which measures this sector’s activity, slowed to 52.4 in February from 54.1 in the prior month.  An index value of at least 50 implies growth in the sector.
• The slight weakening in the latest data can be attributed to slightly softer orders for manufactured goods as reported by respondents and a slower rate of hiring workers by manufacturers.
• Separately, construction spending was essentially unchanged in January after having recorded gains in the five previous months.  Construction for residential units rose, while activity in commercial real estate construction fell.  Though a small segment, construction of buildings for religious purposes has been falling steeply in recent years, while construction of power plants has been rising notably.
• Finally, unemployment insurance claims declined with 351,000 filing for the check for the first time.  This figure had trended down measurably to under 400,000 from November of last year and, as such, was signaling jobs were being created in the economy.  The current lower measure of unemployment filings also implies a decent pace of net job creation that is probably taking place right now in the economy.  There may indeed be something close to 3 million net new jobs in 2012.