Economist's Commentary: June 2, 2008
Quick Take on the Economy: June 2, 2008
By Ken Fears, Manager of Regional Economics
ISM Index
- The index of Institute of Supply Management - which is one of the most timely information sources (this data is for May) registered a monthly index of 49.6, up 1% from 48.6% a month earlier.
- A reading below 50 implies contraction in the manufacturing sector, but not necessarily for the overall economy. Historically, a reading below 47 on a consistent basis is associated with recessionary conditions.
What does this mean for Realtors ® and consumers?
- The economic expansion remains weak, but this is a positive sign.
- Though still in a contraction phase, the manufacturing sector appears to be moving towards an expanding phase as retailers who have let inventory levels get too lean place new orders. This shift could help to stabilize employment, confidence and demand for housing.
- The economy is expected to be much better in the second half. The tax rebate checks will provide a nice boost to income and spending.
Daily Forecast Update
- NAR's monthly official forecast as of May 7th (15K PDF)
- GDP Q2: 1.1%
- GDP Q3: 2.1%
- Unemployment rate by election time: 5.5%
- Average 30-year fixed mortgage rate in June: 6.2%
- Average 30-year fixed mortgage rate in December: 6.3%
- The next Fed policy change: a rate hike in January 2009.
This is one in a series of commentaries by the Research staff of the National Association of REALTORS®. Read more commentaries >
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