US data reviewed: missing expectations - Nomura

Analysts at Nomura offered their reviews on today's US data.

Key Quotes:

"Empire State Survey: 

This survey became the first to show a sharp retreat in the headline index after strong readings since the election. The headline business conditions index fell to 5.2 in April, below expectations (Nomura: 16.0, Consensus: 15.0), from 16.4 in March. The new orders index dropped sharply to 7.0 from 21.3 in March, the highest reading since April 2010. These indexes suggest more modest growth in April than previously reported by the survey respondents in previous months. However, we caution against reading too much into a single print, as other indexes of this survey held up. The shipment index increased slightly to 13.7, suggesting a moderate pace of expansion. Moreover, price increases remained steady in the month. The prices paid index was up 2pp to 32.8 and the prices received index was up 4pp to 12.4. Employment indicators remained elevated. The number of employees index jumped 5pp to 13.9, the highest reading since March 2015. The average workweek index declined to 8.8 from 15.0, but remained well above the recent trend. Forward-looking indicators (six-month outlook) suggest that businesses generally feel optimistic about future conditions. The future business conditions index was up 3pp to 39.9, although still lower than the levels seen after the election. Also notable was the future capital expenditures index, which increased 4pp to 27.7, the highest level since February 2015. We continue to expect some moderation in other business surveys for April considering continued policy uncertainty and a lack of material acceleration in hard data to support heightened optimism. 

NAHB housing index:

The NAHB housing index slipped by 3pp to 68 in April, below expectations (Nomura: 71, Consensus: 70). All three sub-indexes showed a slight decline while remaining at elevated levels. The current single family sales index inched down by 3pp to 74 and the future sales index slipped 3pp to 75. The prospective buyers traffic index remained elevated at 52, down 1pp from the prior month, suggesting healthy demand. This report suggests that home builders’ confidence remains strong despite a slight decline. However, “hefty regulatory costs and ongoing increases in building material prices” were reported as challenges faced by home builders."