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• Global Business Confidence - Improving
• Global business confidence notably improved in May. While sentiment remains very weak and fragile, it is well above its April low. Expectations regarding the six-month outlook are negative but are as strong as they have been since the end of 2007. Sentiment has improved most among real estate firms, perhaps signaling that the housing free fall is abating. Pricing pressures also remain contained given soaring energy and other commodity prices. Hiring intentions have not improved appreciably, however. Confidence remains weakest in the U.S., where it suggests the economy is contracting, and remains best in Asia, where it is consistent with an economy growing near its potential.

• Bankruptcy Filings
• Personal bankruptcy filings continue to increase from their post-reform lows, though at a slow pace. Filings in the first quarter were 26% above last year, but remained 35% below the fourth quarter of 2004, before reform legislation and in a better credit environment. Personal filings remain exceptionally low, especially given the current credit environment. Business bankruptcies are also trending higher, rising 39% in the first quarter. Personal and business bankruptcies will continue to trend higher, particularly provided the more restrictive backdrop.

• Productivity and Costs
• Productivity growth for the first quarter was revised higher. Nonfarm business productivity grew 2.6% (SAAR), compared with 2.2% in the preliminary release; the consensus was for 2.5%. The revision was due to an upward revision to output growth. Growth in unit labor costs was not revised, remaining at 2.2% (SAAR); the consensus expected a downward revision. Stronger reported growth in compensation offset higher productivity. Productivity growth is good despite the weak economy, and the labor market presents little inflationary threat right now.

• Semiconductor Billings
• Global semiconductor sales rose slightly in April (0.4%) to $21.25 billion on a three-month moving average basis. Sales are now 5.9% higher than in April of last year, with gains seen in all regions of the world.

• Factory Orders (M3)
• Factory orders rose 1.1% in April, a much larger increase than expected. The huge gain from a 2.8% rise in nondurable goods orders offset a 0.6% decline in durable goods orders. Petroleum and coal shipments led the way on new orders, but food shipments and chemical products shipments were up handily as well.

• Construction Spending (C30)
• Construction spending decreased by 0.4% in April, slightly less than expected. Private construction declined by 0.5%, driven down by a 2.3% decline in residential construction. Public construction decreased by 0.3%.

• Vehicle Sales - AutoData
• Vehicle sales weakened further in May as gas prices continued to climb. Total sales fell to 14.27 million units (SAAR) down from 14.4 million units in April. This was their lowest pace in 10 years. They were down 13% from a year ago. Light truck sales plummeted while car sales strengthened.

• Major Job Cuts
• Job cuts rose for a second month. The number of workers affected by job cuts totaled 103,522 in May. This is the first time since September 2006 that the measure exceeded 100,000. In April cuts totaled 90,000. Continued restructuring in the auto industry contributed to the May increase.

• MBA Mortgage Applications Survey
• The market composites finished down for the week ending May 30. Coincident with a significant increase in 30-year fixed contract rates, both the purchase index and the refinance index fell substantially. The purchase index fell by 5.4% from last week, while the refinance index fell by no less than 25.7% from one week ago. The combined market index fell by 15.3% from last week. There is thus no sign that the mortgage market has reached bottom yet.

• Chain Store Sales
• Chain store sales are weakening again. Sales fell 0.8% in the week ending May 31 according to the ICSC. Sales have fallen in five of the last seven weeks and were unchanged in one of the other two. Year- over-year growth slipped to 1.2%. Sales suffered from unseasonably cool weather and soaring gasoline prices but were supported by federal tax rebates.

• Oil and Gas Inventories
• Crude oil inventories fell by an outsized 4.8 million barrels for the week ending May 30, according to the Energy Information Administration, compared with expectations of an 0.8 million barrel build. Gasoline inventories rose by 2.9 million barrels, above expectations of a 0.4 million barrel draw. Distillate supplies rose by 2.3 million barrels, topping expectations of a 1.4 million barrel build. Refinery operating capacity rose to 89.7%, which is the highest level since the beginning of the year. This report is bullish.

Source: Economy.com 2008