1. The third estimate of first quarter 2013 real (inflation-adjusted) gross domestic product (GDP) resulted in a relatively large downward revision in the previously reported growth rate―from 2.4% at a seasonally adjusted annual rate (SAAR) to 1.8%
    • Investment in nonresidential structures was revised down, from a decrease of 3.5% to a plunge of 8.3%. This adjustment was mainly driven by a large downward revision in power construction spending
    • Consumer spending was revised down, from an increase of 3.4% to an increase of 2.6%
  2. The financial markets reacted strongly to statements by Federal Reserve Chairman Bernanke that the Fed will need to reduce, and eventually reverse, its asset purchase program as the economy strengthens. These announcements sent stocks down and interest rates up, although rates remained low by historical standards.  This market reaction occurred even though there is no sign of the Fed starting the wind-down process anytime soon. The downward revision in the GDP numbers is an indication that the Fed’s support for the economy is still needed and that investors should believe Bernanke’s statements that any policy reversal is still several months in the future.  Reacting to the GDP data revisions, stock prices partially recovered from market participants’ response to the Fed Chairman’s statement, but interest rates remained elevated

  3. Total commercial construction spending increased 0.5% in June to $874.9 billion (SAAR). Year-to-date not seasonally adjusted (NSA) spending increased 6.2%, compared to the same period in 2012. The June spending number includes the following:
    • Nonresidential building construction spending dropped 1.5% to $284.8 billion and year-to-date was down 2.2% from 2012  
    • Heavy engineering (non-building) construction spending advanced for the third month in a row, up 1.9% to $261.4 billion, but year-to-date was down 2.1% from last year
    • New residential construction spending rose 0.8% to $203.8 billion and year-to-date was up 35.9% from a year ago  
  4. Housing started to recover from its early spring downturn. The outlook for housing remains strong

    • Single-family housing starts rose 0.3% to 599,000 (SAAR) in May after dropping 4.2% in April. The 3-month moving average for single-family housing starts fell 2.8% to 606,000 in May
    • Single-family building permits increased 1.0% to 620,000 (SAAR) in May—its highest level since May 2008. The 3-month moving average for single-family permits was up 1.1% to 611,000—its highest level since June 2008 and an indication that strong single-family residential construction activity lies ahead
    • The NAHB/Wells Fargo Housing Market Index (HMI) jumped 8 points in June to 52―the first reading above 50 since April 2006 and a strong signal for continued improvement in single-family residential construction
    • New home sales were up for the third month in a row, rising 2.1% to 476,000 (SAAR) in May after surging 3.3% in April
    • Rising demand for single-family homes continues to push housing prices higher. The seasonally adjusted (SA) 10-city and 20-city S&P/Case-Shiller® Home Price indexes have both registered 15 consecutive monthly increases. For April, they rose 1.8% and 1.7%, respectively. On a year-over-year NSA basis, the 10-city index was 11.6%  higher, and the 20-city index was up 12.1% higher. For all 20 cities, home prices increased for the fifth month in a row on a monthly SA basis and for the fourth month in a row on a NSA year-over-year basis.  
    • The Federal Housing Finance Agency’s (FHFA) Purchase-Only Home Price Index was up 0.7% (SA) in April,  its fifteenth consecutive monthly increase. On a year-over-year NSA basis, the index was up 7.4%  
    • Multifamily housing starts rebounded 21.6% to 315,000 (SAAR) in May after plunging 32.2% in April. The 3-month moving average, which smooths out these erratic monthly movements, slipped 0.2% lower to 319,000 from April  
    • The May 3-month moving average of multifamily building permits was unchanged from April at 345,000 permits  
  5. The May AIA Architecture Billings Index (ABI) jumped 4.3 points to 52.9 from 48.6 in April, the ninth month in the last ten months the ABI was above 50. A reading above 50 indicates increased billings — a positive for future commercial construction
  6. The May Producer Price Index (PPI) for finished goods rose 0.5% (SA) following a 0.7% decline in April. On a year-over-year NSA basis, the May PPI was up 1.7%

  7. A price index for inputs used in nonresidential construction, excluding capital equipment, rose 0.2% (NSA) in May after declining 0.1% in April. The index was up 0.3% (NSA) from May 2012, while the PPI for inputs for residential construction was up 1.6%

  8. The Consumer Price Index (CPI) edged up 0.1% (SA) in May after falling 0.4% in April.  The NSA CPI was 1.4% higher than in May 2012. Core CPI, which excludes food and energy prices, rose 0.2% (SA) in May after increasing 0.1% in April. On a year-over-year basis, the index was 1.7% (NSA) higher in May