In data compiled over March 12 - March 23, COVID-19 related shutdowns pushed the IHS Markit Flash U.S. Composite Purchasing Managers’ Index (PMI) to new series lows, with the headline composite index sinking -9.1 to 40.5 and services dropping -10.3 to 39.1. Manufacturing fell to a 127 month low at 49.2 (-1.5), and manufacturing output was down -3.1 to 47.6. Companies were generally optimistic that business would increase over the coming year, but the degree of confidence was the lowest ever recorded in the survey. Markit commentary noted that the US is likely in a recession, and that March PMI was “roughly indicative of GDP falling at an annualised rate approaching 5%”, with the second quarter likely to be in an even steeper decline.

New home sales dropped -4.4% in February to a seasonally adjusted annual rate of 765,000, and January’s sales were revised upward to 800,000 from 764,000. The number of new homes for sale at the current purchase rate dropped to a 5.0 month supply from 5.1 months, for the lowest inventory since 2017. The median sale price was $345,000 vs January’s $348,200 median and the average sale price was $403,800 vs January’s $402,300 average. On an annual basis, sales were up +14.3% nationally, with the highest annual increases in the Northeast (+47.1%), followed by the West (+24.7%), the Midwest (+15.6%), and the South (+6.3%).

In February, an increase in subsidy payments pushed farm proprietor’s income up $34.1 billion, which in turn helped push overall personal income up +0.6% (+$106.8 billion) and inflation adjusted after tax disposable income up +0.4%. Personal consumption expenditures rose +0.2% ($27.7 billion) with drops in spending for motor vehicles and recreational goods/vehicles offsetting service spending increases primarily due to electricity and gas costs. The rate of personal saving as a percent of disposable income rose from 7.9% to 8.2%, bringing personal savings up +4.5% to $1.384 trillion. Consumer prices rose +0.1% for the month, and +1.8% for the previous 12 months, and core inflation, which excludes food and energy, was up +0.2% for the month and +1.8% for the year.