http://www.bloomberg.com/apps/news?pid=20601087&sid=abyR9kHYgKn4&refer=homeBy Courtney Schlisserman
May 29 (Bloomberg) -- U.S. business activity contracted at a faster pace than forecast this month as orders and employment dropped.
The Institute for Supply Management-Chicago Inc. said today its business barometer decreased to 34.9 from 40.1 in April. Readings below 50 signal a contraction.
The report ran counter to others this month that indicated manufacturing was starting to improve this quarter, perhaps signaling that Chicago’s proximity to the auto slump in neighboring Detroit may be affecting the entire Midwest. Still, private economists have scaled back forecasts for economic growth in the second half of the year.
The figures are “undoubtedly affected significantly by shutdowns in the ailing automotive industry,” Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc., said in a note to clients. “The rate of decline in manufacturing output will moderate in coming months.”
Another report showed confidence among consumers rose this month to the highest level since September, reinforcing signs that the worst recession in half a century is abating. The Reuters/University of Michigan final consumer sentiment index increased to 68.7, more than forecast, from 65.1 in April.
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Um yeah, consumers can be as confident as they want, it's consumer spending and purchasing power that matters...
