Clarksville Weekly Market Snapshot from Frazier Allen for the week of May 31st, 2015

Clarksville, TN – The economic data reports remained mixed. Real GDP fell at a 0.7% annual rate in the second estimate for 1Q15 (vs. +0.2% in the advance estimate). The revision largely reflected slower inventory growth and a wider trade deficit. Consumer spending rose at a 1.8% pace (vs. +1.9%), while business fixed investment fell 2.8% (vs. -3.8%).

There is currently a debate about whether the seasonal pattern in a number of GDP components may have changed post-recession. Unfortunately, we really don’t have enough data to say for sure.

Durable goods orders fell 0.5% in April, reflecting only a partial retreat in aircraft orders (which had surged in March). More importantly, core capital goods orders rose 1.0%, following a 1.5% gain in March (they plunged 5.1% in February).

The Chicago Purchasing Managers’ Index unexpectedly fell below the breakeven level in May, with new orders, backlogs, production and employment all contracting.

Except for the Chicago PMI, financial market participants largely ignored the economic data, seemingly anxious about developments in the rest of the world.

Next week, we’ll receive some fresh economic data (ISM surveys, motor vehicle sales, the Fed Beige Book), but the focus is likely to be on Friday’s job market figures. The end of the school year often presents some difficulties for the seasonal adjustment (we can expect to add about a million jobs before adjustment).

The unemployment rate should hold steady. The employment/population ratio is trending gradually higher, but still suggests an ample amount of slack in the job market.

Important Disclosures

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Material prepared by Raymond James for use by its financial advisors.

The information contained herein has been obtained from sources considered reliable, but we do not guarantee that the foregoing material is accurate or complete. Data source: Bloomberg, as of close of business May 21st, 2015.

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