April Housing Starts Grow at Fastest Pace in Eight Years
Residential construction activity rebounded strongly in April, according to the Census Bureau and the U.S. Department of Housing and Urban Development. New housing starts jumped from an annualized 944,000 in March to 1,135,000 in April, the fastest pace since November 2007 (the month before the start of the Great Recession). Both single-family and multi-family housing starts were higher in April, giving comfort that residential construction is beginning to stabilize. To learn more, visit here.
U.S. and China Activity Down in May, Europe Improved
For the second straight month, the U.S. Manufacturing PMI declined (from 54.1 in April to 53.8 in May), easing to its lowest level since October 2013. This slowing was a result of decelerated growth in new orders and output, as well as a contraction in exports. The China Manufacturing PMI also declined in May, but at a slower pace than previous months. The economy in Europe, on the other hand, is much better than it has been in a while, with new orders, output and exports all expanding modestly in May. To learn more, visit here.
Permanent R&D Tax Credit Passes in House of Representatives
On May 20, the House of Representatives passed legislation H.R. 880 to reinstate, strengthen and make permanent the research and development (R&D) tax credit. Extended 16 times since it was first enacted in 1981, the R&D tax credit has never been a permanent part of the tax code. The previous tax credit expired at the end of 2014, making it difficult for businesses to plan for long-term R&D projects. It is now up to the Senate to take up this legislation and move it forward. To learn more, visit here.
Weekly Economic Report Shows Renewed Strength of the Euro
Manufacturers experienced some relief last week from the negative impact of the soaring U.S. dollar when the euro hit its highest level in the past few months. Still, overall manufacturing activity remains soft, with production in the sector unchanged in April, resulting in five straight months of weakness. To learn more, visit here.