Today's US economic data -- NY Fed Empire State Mfg Index and the NAHB Housing Market Index -- came in below consensus but do not undermine the idea of a moderate pickup in GDP Growth in Q216. Besides being of minor importance, neither correlates well with broader measures of manufacturing or housing activity. The markets would be best to ignore them. Consensus is for stronger US economic data to print the rest of the week.
NY Fed Empire State Mfg Index
1. The drop in the Index to -9.02 in May from +9.6 in April is probably lagging the softening seen in the Mfg ISM in April. Consensus was for a decline to +6.5.
a. The two surveys moved in the same direction in only 2 of 4 months this year, and missed in April.
2. The NY Fed Index is not a good predictor of the Phil Fed Mfg Index, due Thursday.
a. The two moved in the same direction also in only 2 of 4 months this year.
NAHB Housing Market Index
1. This Index was 58 in April for the 4th month in a row. Consensus was for an uptick to 59.
2. The Index remained slightly below the 60-65 range seen from June 2015 through January 2016 (average, 61), but it was still higher than in any other month of this recovery.
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