A modest May flower

Through the end of the first week, the good news diffusion index May is off a better start than it got in April. Thirty percent of the news has been good so far in May.

New orders for manufactured goods in March decreased 0.9 percent to $345.3 billion. Bad news continues for factories.

Total construction spending for March was 0.3 percent above February. A ray of sunshine, albeit not significantly bright, and entirely in public sector work.

In March, consumer credit decreased at an annual rate of 5.2 percent. Revolving credit decreased at an annual rate of 6.8 percent, and nonrevolving credit decreased at an annual rate of 4.2 percent. Still falling—a bad thing even if the Fed pointed out a more mixed set of signals in the first quarter totals.

Productivity rose 0.8 percent in the nonfarm business sector in first-quarter, as hours fell faster than output. Unit labor costs increased 3.3 percent. A mixed report. The unit costs were driven by wage gains.

Nonfarm payroll employment continued to decline in April (-539,000), and the unemployment rate rose from 8.5 to 8.9 percent. Obviously bad news; we can anticipate this report being bleak for quite a while.

The composite index of five labor market indicators dropped 2.1 percent in April. Four of the five indicators fell. Those were, in order of their contribution to the decline, goods-producing employment, the unemployment rate, the long-term (15+weeks) unemployment rate, and the aggregate hours index. The employment-to-population ratio was unchanged.

There may be a bud of hope in the fact that the index edged back a little closer to its 6-month moving average. In the past, the trough in the difference between the MA and the series has been closely associated with the timing of the recession trough.