Input Stories

Existing home sales decreased 0.5% in April and 2.0% from April 2024. Housing inventory grew to 1.45 million units, reflecting a 9.0% rise from March and a 20.8% jump from last year. The median existing home price was $414,000, up 1.8% from last year. The Northeast and Midwest registered increases, while the South and West posted decreases.

Single-family home sales fell 0.3% in April and 1.4% over the year, with the median price increasing 1.7% from April 2024 to $418,000. Condo and co-op sales slipped 2.6% to 370,000 units in April and were down 7.5% from last year. Meanwhile, the median price rose 1.4% from the prior year to $370,100.

Homes were typically on the market for 29 days in April, down from 36 days in March but up from 26 days in April 2024. First-time buyers made up 34% of sales in April, up slightly from 32% in March and 33% at the same time last year.

Manufacturing activity fell modestly in the Tenth District in May, with the month-over-month composite index up one point to -3. Meanwhile, expectations for future activity declined slightly but remained positive. The Tenth Federal Reserve District encompasses the western third of Missouri; all of Kansas, Colorado, Nebraska, Oklahoma and Wyoming; and the northern half of New Mexico. The month-over-month decrease in activity continued to be due primarily to declines in nondurable manufacturing, specifically food manufacturing, and durable manufacturing was largely unchanged. While production, shipments and new orders fell moderately in May, employment increased, inventories were flat and backlogs fell.

Production fell five points to -10, while new orders inched up from -11 to -9. New orders for exports decreased significantly from -10 to -21 over the month. Employment jumped in May, rising from -11 to 3, while the average employee workweek slipped further negative, decreasing from -6 to -9. The backlog of orders worsened from -20 to -23. The year-over-year composite index for factory activity ticked up from -8 to -5. Prices received and prices for raw materials decreased both month-over-month and year-over-year in May.

In May, survey respondents were asked about their firm’s hiring and capital expenditure plans. About half of firms (52%) reported that their plans have not changed from the beginning of the year, but 34% anticipate decreases and 14% expect increases. Similarly, more than half (60%) of firms have not changed their capital expenditure plans, while 30% predict decreases and 10% forecast increases. Additionally, firms were asked about how often they are changing prices. Roughly 40% reported they have not changed the frequency with which they change prices, but 37% indicated changing prices more often and 16% are changing prices much more often.

The S&P Global Flash U.S. Manufacturing PMI rose from 50.2 in April to 52.3 in May, a three-month high and above the 50-point marker that signals growth in business conditions. This is also the largest increase in business conditions since June 2022. Factory production edged back into growth after two months of decline, led by new order growth that hit a 15-month high. Nevertheless, the most significant contributor to PMI growth was an increase in inventories, which rose to the greatest extent since the start of the survey in 2009, due to firms stockpiling as a safeguard against tariff impacts. Longer delivery times, associated with busier manufacturing activity, also aided the rise in the manufacturing PMI. Meanwhile, employment fell for the second consecutive month, putting downward pressure on the PMI.

Overall business activity improved after April’s 16-month low but remained subdued at 52.1 amid continued fears about tariffs. Export orders fell for another month, especially in services, and prices for both goods and services surged at rates last seen in August 2022, stemming from tariff-related costs and indicating sharp consumer price inflation. Manufacturers’ selling prices posted the largest monthly increase since September 2022, and input costs rose at the fastest rate since June 2023.

Meanwhile, optimism about future business conditions rebounded to the highest level since January after falling to a two-and-a-half-year low in April. Sentiment lifted amid a pause on additional tariffs and improved economic conditions. For manufacturers, optimism reached a three-month high, and goods producers displayed greater optimism about reshoring production and switching to domestically sourced goods. Nevertheless, optimism is still down from 2024 averages as anxieties about supply chain disruptions, government policies and tariffs still abound.

Building permits fell 4.7% in April and 3.2% over the year. Permits for single-family homes in April declined 5.1% from March and 6.2% over the year. Meanwhile, permits for buildings with five or more units decreased 4.4% from March but increased 2.6% over the year.

In April, housing starts rose 1.6% from March but fell 1.7% from April 2024. Starts for single-family homes declined 2.1% from March and 12.0% from April 2024. On the other hand, starts for buildings with five or more units jumped 11.1% over the month and 28.8% over the year.

Meanwhile, housing completions decreased 5.9% over the month and 12.3% over the year. Similarly, single-family home completions fell 8.0% from March and 16.6% from April 2024. Completions for buildings with five or more units ticked up 0.2% over the month but fell 1.7% from one year ago.

U.S. import prices rose 0.1% in April, after falling 0.4% in March, with higher nonfuel prices more than offsetting lower fuel prices. Over the past year, import prices inched up 0.1%. Meanwhile, U.S. export prices ticked up 0.1% for the second consecutive month in April. Over the past year, export prices increased 2.0%.

Fuel import prices fell 2.6% in April, following a 3.4% drop in March, with lower prices for natural gas and petroleum driving the decline. Prices for fuel imports plummeted 12.0% from April 2024, the largest over-the-year decline since October 2024. Import prices for petroleum decreased 2.0% over the month in April and 13.3% from last year. Meanwhile, natural gas prices plunged 17.5% in April but jumped 59.9% over the year.

Nonfuel import prices increased 0.4% in April, after slipping 0.1% in March. Higher prices for capital goods, nonfuel industrial supplies, consumer goods and automotive vehicles drove the increase. The price index for nonfuel imports grew 1.2% over the past year, led by higher prices for nonfuel industrial supplies and materials, automotive vehicles and capital goods.

After edging down 0.2% in March, agricultural export prices rose 0.5% in April. Over the past 12 months, agricultural export prices increased 1.9%. Meanwhile, nonagricultural export prices ticked up 0.1% for a second consecutive month in April. Higher prices for consumer goods, capital goods and automotive vehicles more than offset lower prices for nonagricultural industrial supplies and materials. Over the past year, nonagricultural export prices advanced 1.9%.

The NFIB Small Business Optimism Index fell 1.6 points in April to 95.8, remaining below the 51-year average of 98. April’s drop stemmed from a decline in the number of business owners expecting better business conditions and the number of unfilled jobs. Of the 10 components included in the index, only three increased, six decreased and one stayed the same. The Uncertainty Index fell four points to 92 but remains far above the 51-year average (68) and the average since 2016 (80).

Labor quality was cited as the top concern for many small business owners in April, with 19% reporting it as the most important problem for the third month in a row. In April, 34% of small business owners reported jobs they could not fill, down six percentage points from March. The challenge of filling open positions remains acute, particularly in manufacturing, transportation and construction. Taxes were the second most important concern, with 16% reporting them as their most important problem, down two points from March. Inflation now ranks third.

A net 33% of small business owners reported raising compensation, down five percentage points from March. Profitability remained under pressure, with a net negative 21% reporting positive profit trends, but was seven points better than in March and the highest reading since March 2023. Of those reporting lower profits, 38% claimed weaker sales, while 14% cited ordinary seasonal adjustments. A net 28% of small business owners planned price hikes in April, down two percentage points from March, and demand remains too strong to trigger widespread price reductions. Meanwhile, 5% reported their last loan was harder to get than previous attempts, down one point from March, but a net 6% of owners reported paying a higher rate on their most recent loan, up two points from the prior month.

The outlook for general business conditions fell six points to 15, the lowest since last October. Additionally, the share of firms saying it is a good time to expand remained the same at 9%. The outlook will remain gloomy and turbulent as long as uncertainty is the norm. Down from highs post-election, when optimism netted 52% in December and far more small businesses were expecting better business conditions in the next six months, expected business conditions are back down to 15%. This is still more optimistic than this time last year, when the indicator netted -37%, meaning businesses expected worse conditions.

Manufacturing activity in New York state continued to decline in May. The headline general business activity index worsened slightly from April, slipping from -8.1 to -9.2. On the other hand, the new orders and shipments indexes grew after contracting the previous month, with new orders increasing from -8.8 to 7.0 and shipments rising from -2.9 to 3.5. Unfilled orders and delivery times both inched up from 4.1 to 4.8 and from 0.0 to 1.0, respectively. Meanwhile, inventories fell from 7.4 to 4.8, and supply availability dropped from -5.7 to -11.4.

The index for the number of employees fell further into negative territory, declining from -2.6 to -5.1, while the average employee workweek improved but remained negative, rising from -9.1 to -3.4. Input prices ticked up for the fifth consecutive month to 59.0, the highest level in two years. Meanwhile, selling prices fell 5.8 points to 22.9, a reflection that prices received increased at a slower pace while the pace of rising input prices continued to quicken.

Looking forward, firms continue to expect conditions will remain gloomy six months ahead. The index for future business activity remained negative but rose 5.4 points to -2.0. New orders are anticipated to decrease, but by a smaller degree, with the indicator rising from -6.6 to -2.7. Meanwhile, capital spending plans turned negative, decreasing 8.3 points to -6.7. On the other hand, employment expectations rose 8.2 points to 11.6, but the average employee workweek outlook weakened, continuing a trend from the prior four months. Input prices are expected to remain high, but selling price expectations retracted 10.7 points to 35.2. Meanwhile, supply availability is forecasted to continue to contract in the next six months and at a faster pace than predicted in April.

In May, Philadelphia’s regional manufacturing activity remained weak. The index for current general business activity rose but remained negative, increasing from -26.4 to -4.0. Twenty-three percent of firms reported decreased activity this month, while 19.0% saw increases in May, an improvement from the 12.5% reporting increases in April. The index for new orders recovered from a sharp decline last month, rising from -34.2 to 7.5. On the other hand, the shipments index continued to fall, dropping 3.9 points to -13.0. Meanwhile, employment and the average employee workweek rose in May, to 16.5 and 2.0, respectively.

The prices paid index edged up from 51.0 to 59.8, the highest reading since June 2022, while the prices received index increased from 30.7 to 43.6. As has been the case for many months, the prices received index remains lower than the prices paid index, indicating manufacturers have been absorbing a sizable portion of those higher costs paid.

Looking ahead, indicators showed growing optimism about the future after two months of gloomy readings. The index for future general business activity soared more than 40 points to 47.2 in May. Compared to the previous month, a lower proportion of firms (20.2%) expect decreases in activity, compared to last month’s reading of 29.0%, while 67.3% anticipate activity will improve. Similarly, the future new orders index surged from 6.6 to 49.7, and the future shipments index rocketed from 5.0 to 51.1. Meanwhile, the index for future employment turned positive, rising from -0.6 to 23.0. The capital expenditures index improved from 2.0 to 27.0. The future prices paid index edged down from 63.1 to 61.6, while the future prices received index fell from 67.7 to 50.0, indicating manufacturers’ concerns about future costs are easing slightly.

The Producer Price Index for final demand (also known as wholesale prices) decreased 0.5% over the month in April, after remaining unchanged in March. Over the year, producer prices moved up 2.4%, coming in slightly lower than expectations. Meanwhile, prices for final demand excluding foods, energy and trade services edged down 0.1% over the month in April, the first decline since falling 0.8% in April 2020. On the other hand, prices for these goods still advanced 2.9% from April 2024.

In April, prices for final demand services declined 0.7%, which drove the decrease in the headline rate, while prices for final demand goods were unchanged. More than 40% of the decline in the final demand services index in April can be traced to a 6.1% decrease in margins for machinery and vehicle wholesaling. Meanwhile among the final demand goods prices, the index for general purpose machinery and equipment advanced 1.1%, and residential electric power and utility natural gas also moved up. On the other hand, prices for chicken eggs dropped 39.4% over the month in April, contributing to the decline in finished consumer foods.

Processed goods for intermediate demand rose 0.2% in April, following a 0.1% decrease in March. The increase can be attributed to a 0.5% rise in the index for processed materials less foods and energy, which more than offset price decreases for processed foods and feeds and processed energy goods, which fell 1.0% and 0.2%, respectively. Over the year, the index rose 0.5%, down from the 0.7% increase in March.

Meanwhile, prices for unprocessed goods for intermediate demand fell 3.2% in April. Nearly 60% of the April decline can be traced to a 5.0% drop in the prices for unprocessed energy materials. Additionally, the unprocessed foodstuffs and feedstuffs index decreased 3.8%. Despite the monthly declines, prices for unprocessed goods for intermediate demand were still up 1.7% from April 2024.

Consumer prices increased 0.2% over the month and 2.3% over the year in April, slowing from the 2.4% rise in March to the slowest over-the-year increase in more than four years. Core CPI, which excludes more volatile energy and food prices, edged up 0.2% over the month and rose 2.8% over the year, the same as the 12-month increase in March.

Energy costs increased 0.7% over the month in April, driven by a 3.7% hike in the utility (piped) gas service index, but fell 3.7% over the year. On the other hand, the rise in the utility (piped) gas service index was offset partially by an over-the-month decrease in the index for fuel oil (down 1.3%).

Food prices dipped slightly in April, falling 0.1% over the month, driven primarily by a 12.7% decrease in the index for eggs, but were still up 2.8% over the year in April. The food at home index fell 0.4% from March, the largest decline in that index since September 2020, but increased 2.0% from April 2024. Meanwhile, food away from home rose 0.4% in April and 3.9% over the year.

Shelter grew 0.3% over the month and 4.0% over the year, consistent with the 12-month increase in March. Meanwhile, prices for transportation services edged up 0.1% over the month and rose 2.5% over the year, with motor vehicle insurance and motor vehicle maintenance and repair leading the increase, surging 6.4% and 5.6% over the year, respectively. On the other hand, airline fares declined 2.8% over the month and 7.9% over the year, partially offsetting some of the increase in the transportation services index.

Although the over-the-year headline inflation rate continues to tick down, risks of higher inflation have risen. In the press conference following the May meeting, Federal Reserve Chairman Jerome Powell indicated that the Federal Open Market Committee will keep its policy stance consistent until notable changes to inflation or the labor market are seen in the data. Therefore, markets are anticipating that the FOMC will keep rates steady at its meeting in June.