Consumer Confidence Simultaneously Up/Down
The Reuters/University of Michigan sentiment index decreased last month to a 26-year low, while its gauge of expectations fell to the lowest level since 1990. The measure of prospects dropped even more this month, sending sentiment to a 28-year low, the group reported last week. The Reuters/University of Michigan survey shows its index of consumer confidence dropped to 59.5 in May from 62.6 in April. The average reading of 2007 was 85.6.

Meanwhile, a nationwide telephone poll of 2,208 adults, conducted May 1 to 8 by the Los Angeles Times and Bloomberg, found that just 19 percent of all respondents expected the economy to be in better shape in six months, while 37 percent expected it to be worse and 40 percent expected it to be about the same."

On the other hand, a survey of Bloomberg News users across five continents shows that confidence in the global economy has "improved for the second consecutive month in May on signs the worst of the credit squeeze may be over." The Bloomberg Professional Global Confidence Index rose to 22.7 from April's 14.5, with respondents becoming less pessimistic in every region. (A reading below 50 shows negative sentiment.) The measure fell to as low as 13.1 in March. Of those surveyed in the U.S., the index almost doubled to 51.3 from 27.7. They were also more upbeat about the outlook for the dollar. The U.S. currency has advanced 3.7 percent from its record low of $1.6019 per euro on April 22.

Manufacturing Output Falls
Manufacturing output fell 0.8 percent in April. Half of this loss resulted from a drop of 8.2 percent in the production of motor vehicles and parts, says the United States Federal Reserve. The factory operating rate moved down 0.8 percentage point, to 77.5 percent.

Production of durable goods fell 1.4 percent after having been unchanged in March. Also, the durable manufacturing industries that registered decreases in output of more than 1 percent in April included nonmetallic mineral products, fabricated metal products and machinery.

Capacity utilization also fell from 78.3 in March to 77.5 in April.

Manufacturers Sell More
Manufacturers' adjusted sales rose 1.1 percent from February to March in 2008, according to the U.S. Census Bureau. During the same period, inventories inched up 0.9 percent.

Also, manufacturers' adjusted sales increased 4.7 percent between March 2007 and March 2008. During these same 12 months, inventories climbed 6.5 percent.

Bright Spots for Builders
U.S. home builders broke ground on 8.2 percent more homes in April, led by a 36 percent increase in the multi-family category, the Commerce Department estimated Friday. Housing starts rose to a seasonally adjusted annual rate of 1.032 million, far more than the 939,000 that economists surveyed by MarketWatch had been anticipating. However, starts of single-family homes declined for the 12th straight month.

Small-Biz Loans Harder to Get
A survey released this month by the Federal Reserve found that about half of U.S. banks are tightening their standards on loans to small firms, compared with about 30 percent that reported doing so earlier this year, says The Wall Street Journal. And nearly two-thirds have raised the rates they're charging on those loans.

"A lot of the banks, especially the larger ones, are really cutting back," a financial services researcher was quoted as having said. "It's absolutely harder for small businesses to get credit today."

NABE Outlook: Recession Watch
While a slight majority of the National Association of Business Economics' (NABE) panel of forecasters expects the economy to avoid a recession in 2008, growth is expected to average just three-quarters percent before accelerating in the second half in response to fiscal and monetary stimulus.

The NABE panel expects little economic growth in the first half of 2008, but anticipates a significant pickup in the second half. The 2009 outlook, shown for the first time, calls for real gross domestic product to grow 2.9 percent over the course of the year.

The NABE economists look for the trade deficit to decline further in 2008. Consistent with its lower forecast for 2008 growth, the panel has pushed up its estimate for unemployment and the federal budget deficit.

UN Sees Lower World Economic Growth
The United Nation's Department of Social and Economic Affairs (DESA) predicts that world economic growth will fall steeply to 1.8 percent this year and 2.1 percent next year, down from 3.8 percent in 2007. The reasons for the lower forecast: lack of risk management in the U.S. housing industry; the weak U.S. dollar; and skyrocketing cost increases for commodities like oil.

Latest Unemployment Numbers
Based on the U.S. Department of Labor's latest numbers, for the week ending May 10, the advance figure for seasonally-adjusted initial claims was 371,000. This is an increase of 6,000 from the previous week's unrevised figure of 365,000, according to the. The four-week moving average was 365,750, a decrease of 1,000 from the previous week's average.

Earnings Fall in April
Real average weekly earnings fell by 0.5 percent from March to April after seasonal adjustment, according to preliminary data released by the U.S. Department of Labor last week. A 0.1 percent increase in average hourly earnings was offset by a 0.3 percent decrease in average weekly hours and a 0.2 percent increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

Retail Sales Fall Slightly
The U.S. Census Bureau on Tuesday announced that advance estimates of U.S. retail and food services sales for April (adjusted for seasonal variation) were $378.1 billion, a decrease of 0.2 percent from the previous month. But the figure represents a 2.0 percent increase above April 2007.

Total sales for the February-through-April 2008 period were up 2.2 percent from the same period a year ago. The February-to-March 2008 percent change was unrevised from 0.2 percent. Retail trade sales were down 0.3 percent from March 2008, but were 1.8 percent above last year. Gasoline station sales were up 16.3 percent from April.

Import Prices Increased
The U.S. Import Price Index increased 1.8 percent in April, the U.S. Bureau of Labor Statistics reports. The 1.8-percent rise followed increases of 2.9 percent, 0.2 percent, and 1.5 percent in March, February and January, respectively.

Petroleum prices advanced 4.4 percent in April after a 9.2-percent rise in March. Prices for petroleum rose 57.2 percent for the year ended in April.

The price indexes for overall imports and non-petroleum imports advanced 15.4 percent and 6.2 percent, respectively, during the past year.

Ship Shortage Hurts U.S. Exporters
"U.S. exporters find themselves unable to take full advantage of the competitive edge of a weak U.S. dollar," the L.A. Times reports, because there aren't enough oceangoing vessels to carry products.

"Last year, I could have called for a ship and had it by next week. Now it takes up to six weeks to book one," said one exporter. "There just isn't enough room on the ships. When the U.S. economy cooled and American consumers began tightening their belts, oceangoing shipping lines pulled as many as 30 percent of their vessels."

Nano Part's Cost Cut and Cut Again
Three examples of how Ratan Tata's subcompact car could carry a sticker price of $2,500 appear in a recent BusinessWeek article: a steel tube replaces a steel rod for the steering wheel and employees redesigned it as one piece rather than two; the driveshaft design resulted in a lighter and easier-to-make part; and a lighter rear-wheel shaft also saves on material cost and permits better mileage.

Fed Chief Urges Banks to Improve Risk Management
Supervisors must redouble their efforts to help organizations improve their risk-management practices, Federal Reserve Chairman Ben Bernanke said during a speech in Chicago last week. "Accordingly, we have increased supervisory attention to this issue. We have focused on the institutions in most need of improvement, but we will continue to remind the stronger institutions of the need to remain vigilant, particularly in light of the ongoing fragility of market conditions," he added.