New home sales increased by 4.1% in April

Yahoo Finance Live's Julie Hyman breaks down the latest new home sales and S&P Global services PMI data.

Video Transcript

JULIE HYMAN: Let's get to some breaking new home sales data just coming out in the past few moments here. New home sales rising, unexpectedly rising I should say, by 4.1% to an annual pace of 683,000 here. So again, and that's unchanged from the prior month, but up 4, I should say, that's up 4.1% month-over-month.

Maybe I'm looking at the wrong numbers here. It's the April numbers. In any case, the 683,000 is the annual pace that we are seeing here for those-- Ah, that's because we got a revision the prior month. That just popped up on my screen. Because I was seeing the prior month at the same number. So that means in March we saw an annual pace was revised downward to 656,000. Then in April, a 4.1% increase to 683,000.

I have to admit, more interesting to me, were the global PMIs that we just got from S&P Global, the Purchasing Managers' Index. The composite PMI coming out ahead of estimates of 54 and a half. But that is entirely due to the services side. And this is really closely mirroring what we are seeing play out among the retailers, and among all the companies that have been reporting. In other words, people are spending on experiences, they're spending on services, they are not spending as much on stuff that means manufacturers are not making as much stuff.

So manufacturing PMI below 50 at 48.5, that is a two-month low. Services at 55.1 above estimates. And I believe that is something like a 13-month high here. Yes, it is, the services index is at a 13-month high.

BRAD SMITH: Yeah, and even as I'm reading through the PMI data that you just mentioned a moment ago, divergence widening between manufacturing and services, which you were pointing to in some of the figures there. Particularly on the context side that they did provide within this S&P Global flash composite output index. Particularly the rise in output, sharpest since April of 2022, led by service providers, reported stronger demand conditions. And then manufacturers, they registered growth in production, however, only marginally, and slowed from the previous survey period here.

But on the new orders front here, and that's where it really caught my attention, rose for the third straight month running in May. Rate of increase quickening to the steepest for a year, and mirrors the trend for output they mentioned to go for service providers [INAUDIBLE].

JULIE HYMAN: Total private sector workforce numbers also up at the fastest pace since July 2022. That's not what the Fed wants to hear.

BRAD SMITH: Yeah no, not at all.