A measure of U.S. consumer sentiment plunged in May due to slow wage growth which weighed on the economic recovery.
The Thomson Reuters/University of Michigan’s initial reading for May, which was released on Friday, fell to 81.8, down from April’s 84.1. This was less than the median forecast of 84.5 in a Reuters survey of economists.
“The main concern behind the small May loss involved dispiriting trends in wages,” survey director Richard Curtin said in a statement.
About 58 percent of consumers acknowledged that the economy was taking a turn for the better, compared with 49 percent last month. The poll’s gauge of current economic conditions declined to 95.1 up from 98.7. This was less than economists’ forecast of 99.0.
The barometer of consumer expectations fell from 74.7 to 73.2, coming slightly short of the predicted 75.0. However, the one-year inflation forecast remained static from April at 3.2 percent. The 5-10 year inflation outlook fell from 2.9 percent to 2.8 percent.
U.S. housing starts surged in April while building permits hit nearly a six-year high as the housing market appears to recover, reported the Commerce Department. Groundbreaking rose 13.2 percent to 1.07 million units, the most since November 2013.
Housing starts had increased by revised 2 percent in March, which was less than the reported figure of 2.8 percent increase. Starts for single-family homes, which comprise the biggest proportion of housing market, surged 0.8 percent to 649,000 units. Groundbreaking for multi-family homes rose 39.6 percent to 423,000 units.
Permits to put up homes rose 8.0 percent to 1.08 million last month, the most since June 2008; with permits for single-family homes increasing 0.3 percent to 602,000 units. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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