Mike’s Real Estate Show

The Commerce Department got the month off to a good start when it reported on May 1 that consumer spending in March was up 0.4%, double the increase that economists had predicted. Consumer spending, which accounts for 70% of U.S. economic activity, is vital to the nation’s long-term economic health.

Further economic stimulus came from the Federal Reserve, which announced on April 30 that it was pushing down the federal funds rate — the rate at which banks lend money to one another — to 2%, the lowest level since late 2004. The reduction marked the seventh rate cut by the central bank since it began easing credit conditions last September. On the heels of the Fed’s action, many commercial banks announced they were cutting their prime lending rate to 5%.

The Commerce Department also reported on April 30 that the gross domestic product — the sum of all goods and services produced in the United States — expanded at a 0.6% annual pace in the first quarter. The gain, which matched the rate of the previous three months, was better than forecast.

Job losses slowed in April, with the Labor Department reporting May 2 that employers shed 20,000 jobs from their payrolls, far fewer than the 75,000 cuts that economists were anticipating. The unemployment rate also fell from 5.1% in March to 5% in April, again surprising economists who had expected unemployment to climb to 5.2%.

Also on Friday, the Commerce Department reported that factory orders in March rose 1.4%, far better than the 0.2% rise analysts had forecast. The rebound followed a 0.9% dip in February and a 2.3% drop in January.

Economic news due out this week includes reports on workforce productivity on May 7 and the U.S. trade balance on May 9.

Economic data compiled from government reports and news services Bloomberg.com, msnbc.com, cnbc.com, cnn.money.com and Yahoo Economic Calendar.
 
 
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