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In March, the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index recorded a 3.4% annual gain, down slightly from 4.0% in February. The 10-City Composite saw an annual increase of 4.8% in March, down from 5.2% the previous month, while the 20-City Composite rose 4.1% year-over-year, down from 4.5%. Among the 20 cities, New York again posted the highest annual gain at 8.0%, followed by Chicago at 6.5% and Cleveland at 5.9%. Tampa again exhibited the lowest annual return, with prices falling 2.2%.

On a month-over-month basis, the U.S. National Index rose 0.8%, the 10-City Composite improved 1.2% and the 20-City Composite increased 1.1% before seasonal adjustment. Meanwhile, after seasonal adjustment, the National Index and the 20-City Composite posted decreases of 0.3% and 0.1%, respectively, while the 10-City Composite improved 0.01%. Of the cities tracked by the 20-City Composite Index, 18 showed monthly price growth, signaling that price increases were broad-based across the country. Cleveland (+1.8%), Seattle (+1.8%) and New York (+1.5%) led monthly price gains, while only Tampa (-0.3%) and Miami (-0.2%) exhibited monthly declines.

While affordability continues to be severely constrained, it did not worsen considerably since borrowing costs have stabilized. Mortgage rates continue to hover in the mid-6% range and monthly payment burdens are near multi-decade highs relative to incomes. Nevertheless, weaker buyer demand counteracted persistent supply shortages due to many existing homeowners reluctant to part with low pandemic-era mortgage rates and limited construction activity. March’s upswing in prices underscores both homeowners’ retention of equity and the housing market’s sensitivity to mortgage rates and affordability constraints.

Consumer confidence increased 12.3 points in May to 98.0. The Consumer Confidence Index rose for the first time after falling for five consecutive months. A rebound was apparent in the responses before the May 12 announcement that paused some tariffs on imports from China, but that rebound gained momentum afterward. The improvement was driven largely by consumer expectations with all three components of the Expectations Index—business conditions, employment prospects and future income—increasing from April lows.

The Present Situation Index, reflecting current business and labor market conditions, rose 4.8 points to 135.9. Meanwhile, the Expectations Index, which reflects consumers’ short-term outlook for income, business and labor market conditions, jumped 17.4 points to 72.8, but remained below the recession signal threshold of 80.

All components of the Consumer Confidence Index improved, signaling that consumers are less pessimistic and have regained some optimism about future income prospects. On the other hand, views of the current labor market situation are still poor, with 31.8% of consumers saying jobs were “plentiful,” up slightly from April (31.2%), while 18.6% said jobs were “hard to get,” up from 17.5%. Looking to the future, 26.6% anticipate there will be fewer available jobs in the next six months, down from 32.4% the prior month. Additionally, expectations about future income returned to positive territory, with 18.0% of respondents anticipating increases compared to 13.8% expecting decreases.

May’s recovery in confidence was broad-based across age and income groups, with the strongest improvement among Republicans. Inflation expectations likewise edged down to 6.5% in May but remain elevated, with inflation and high prices remaining a top concern for consumers. Mentions of trade and tariffs were still prevalent in written responses, with consumers expressing fears of increasing prices, but there were also some mentions of easing inflation and lower gas prices.

Buying plans for homes and cars improved materially, particularly after the May 12 tariff announcement. Plans to buy big-ticket items were also up. Meanwhile, expectations for higher interest rates were unchanged. Consumers’ views of their current financial situation improved from April, when it reached the lowest level since 2022. Nonetheless, consumers were more worried about not being able to buy things they need or want than they were about losing their jobs.

Special questions in May focused on if consumers had changed their spending habits or financial behavior recently. More than one-third (36.7%) said they had saved money for future spending, and 26.0% postponed major purchases. On the flip side, 26.6% said they dipped into savings for goods and services. There were sizable differences between income groups, with households making more than $125,000 more likely to save while those under that threshold were more likely to dig into savings or postpone purchases. Higher income groups were also more likely to make advanced purchases ahead of tariff price increases.

Manufacturing activity in the Fifth District contracted in May, but at a slower pace than the previous month, with the composite manufacturing index rising from -13 to -9. Nonetheless, the local business conditions index deteriorated further, falling from -21 in April to -25 in May. On the other hand, manufacturers are less pessimistic about the future, with the outlook for future local business conditions rising from -37 in April to -6. The Fifth Federal Reserve District consists of Virginia, Maryland, the Carolinas, the District of Columbia and most of West Virginia.

Among its components, shipments and new orders improved but remained negative, rising from -17 to -10 and from -15 to -14, respectively. Employment edged up from -5 to -2, indicating hiring decreased at a slower rate in May. The vendor lead time index jumped from 1 to 15 in May, while the share of firms reporting backlogs rose from -24 to -19. The average growth rates of prices paid and received were little changed.

Looking ahead, firms still expect both price indexes to rise in the next 12 months but at a slower pace than forecasted in April. Expectations for future shipments rebounded from -20 to 2, turning positive, while new orders improved notably but remained negative at -3, suggesting that firms anticipate business to decline marginally in the next six months. Expectations for backlogs were largely the same, moving from -30 to -27. Meanwhile, firms continued a cautious approach to equipment and software spending, with expectations improving slightly to -13. Expectations for spending on capital expenditures remained the same at -15. In sum, businesses in the Fifth District are hesitant about the prospects for future growth and making new investments but are less sour on current conditions compared to April.

In May, Texas factory activity held steady, following slight growth in April. The production index fell four points to 0.9, indicating relatively flat output growth. The new orders index remained negative but improved, rising to -8.7 from -20.0 in April. The capacity utilization index also rose but remained negative, up 2.3 points to -1.5, while the shipments index turned positive, increasing six points to 0.5.

Perceptions of manufacturing business conditions continued to worsen in May but at a slower rate of decline than the prior month, with the general business activity index rising more than 20 points to -15.3. The company outlook index also improved while remaining negative, increasing to -11.3 from -28.3. Meanwhile, the outlook uncertainty index, which has been volatile in recent months, retreated in May, falling more than 34 points to 12.7. The series average is 17.3.

Labor market indicators suggested a slight increase in head counts and shorter workweeks in May, with the employment index back in positive territory at 3.5, while the hours worked index remained negative at -3.6. More than 11% of firms reported net hiring, while a smaller percentage (8.0%) noted net layoffs.

Historically high upward pressure on prices persisted in May, while wage growth remained relatively stable. The prices paid for raw materials index softened slightly, falling from 48.4 to 40.7. Meanwhile, the prices paid for finished goods index was largely unchanged, rising just 0.2 points. Both price indexes are roughly double their series averages. Meanwhile, the wages and benefits index is below the series average of 21.1, increasing 0.7 points to 15.0 in May.

The outlook for future manufacturing activity improved from April, with the future production index increasing from 14.8 to 31.1. Meanwhile, the future general business activity index and the future company outlook index both turned positive, rising 16.5 points and 11.6 points to 1.3 and 5.6, respectively. Other indicators also rose but remained below average.

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.