Economy Watch: Construction Spending, EU Unemployment Rise; Manufacturing Expands in May

Construction spending during May was 0.5 percent above the revised April rate. Unemployment in the eurozone continued creeping upward in May. And the ISM manufacturing index pointed to expansion in June.

The Census Bureau said on Monday that U.S. construction spending during May was at an annualized rate of $874.9 billion, 0.5 percent above the revised April rate. The May figure is 5.4 percent above the May 2012 total of $830.4 billion.

Spending on private construction was at an annualized rate of $605.4 billion in May, nearly the same as the revised April rate of $605.7 billion, but up 10.6 percent compared with May 2012. Private residential construction spending was up month over month by 1.2 percent, while nonresidential construction dropped 1.4 percent for the month. Public spending was up in May by 1.8 percent compared with April, but down 4.7 percent since last year.

New single-family home construction spending, according to the Census Bureau, edged up 0.4 percent for the month, but was up 33.2 percent year over year. The spike in multi-family construction was even greater: 2.5 percent for the month and 51.7 percent for the year.

EU Unemployment Continues to Rise

Eurostat, the European Union statistics agency, reported on Monday that unemployment in the eurozone continued its steady upward creep in May, coming in at 12.1 percent for the 17 countries that belong to the euro zone, compared with 12 percent in April, and 11.3 percent a year earlier. Unemployment in the eurozone has been rising steadily since early 2008, pausing only once at the beginning of 2011.

For all 27 countries in the EU, the unemployment rate was 10.9 percent in May 2013, unchanged from the previous month. (The EU grew larger on Monday – to 28 countries — when Croatia officially joined. ) The unemployment rate for the 27 EU countries was 10.4 percent during May 2012.

Spain and Greece, unsurprisingly, are suffering the highest rates of unemployment in the zone, nearly 27 percent in May in each case, with youth unemployment running well above 50 percent. The EU members with the lowest unemployment rates were Austria (4.7 percent), Germany (5.3 percent), and Luxembourg (5.7 percent). The EU country with the largest year-over-year spike in unemployment (again unsurprisingly) was Cyprus – 11.4 percent to 16.3 percent.

Manufacturing Expands in May 

The ISM manufacturing index pointed to expansion in June, according to the Institute for Supply Management on Monday. The PMI was at 50.9 percent in June, up from 49 percent in May. The employment index was at 48.7 percent, down from 50.1 percent, but the new orders index was at 51.9 percent, an increase from 48.8 percent in May.

Wall Street experienced an upward bounce on Monday, with the Dow Jones Industrial Average up 65.36 points, or 0.44 percent. The S&P 500 gained 0.54 percent and the Nasdaq advanced 0.92 percent.