Drab US factory and housing numbers hit recovery hopes

 
Julian Harris
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LACKLUSTRE economic figures weighed on investor sentiment across the pond yesterday, with manufacturing and housing data coming out worse than expected.

The US factory sector kept growing this month, according to Markit’s initial flash estimate. Yet the purchasing managers’ index (PMI) score of 55.4, down from 55.5 in March, disappointed economists who had expected a score of 56 or higher for April.

PMI numbers above the no-change mark of 50 indicate economic growth.

Meanwhile, sales of new single-family homes in the US dropped to their lowest level in eight months in March, according to separate figures published by the Commerce Department.

Sales fell by 14.5 per cent to a seasonally-adjusted annual rate of 384,000 units, significantly below the predictions of economists who expected sales of around 450,000 units.

However, some analysts said that the extremely cold weather experienced in the US at the start of the year could have prompted a knock-on effect, harming the numbers more than expected.

And despite the disappointing manufacturing data, Barclays’ Cooper Howes found room for optimism. “Overall this report is consistent with our view that manufacturing activity will pick up throughout 2014,” Howes said of the Markit PMI figures.

New orders and output both grew at faster rates than during the previous month, Howes observed in a research note.