Economic growth may not hit marks

INDICATOR » May Home Builders Index and New York Fed Manufacturing Survey KEY DATA » NAHB: 70 (up 2 points)/ NY Fed: -6.2 points; Orders: -11.4 points; Expectations: -0.6 point IN A NUTSHELL » “The housing market is beginning to look a little like it did a decade ago.” WHAT IT MEANS » The housing market continues to recover and in many metropolitan areas, prices are pretty much where they were at the peak of the housing bubble. Meanwhile, developers are feeling like things are really strong once again. The National Association of Home Builders’ Index rose in May to a level seen only in boom times. I am not saying construction is booming; only that builders feel that way. For the first five months of the year, the index averaged 68, a level that was exceeded only in 2005 and 1999, two economic bubble years.

The present conditions and expectations indices are near re-

cord highs. Interestingly, though, traffic is good but hardly great. That reflects the reality that sales levels

are no where near the peaks we had seen and will not likely be there anytime soon – if at all. I guess what you have to conclude is that builders feel real good about the industry, even if it is running at a lower pace than

in the past.

Manufacturing has helped keep the economy moving forward, but the strength of this sector may be waning a touch. The New York Federal Reserve Bank’s Empire State Manufacturing Survey took a

tumble in May. Overall activity slowed as orders and backlogs declined. Still, hiring remained solid and respondents were still pretty optimistic.