• Some regional indicators of manufacturing activity have moderated, so forecasters look for a modest drop in the national survey of purchasing managers.
  
  
• Early indicators of May consumer trends may be mixed, with chain store sales softer but vehicle sales slightly better than in April.
  
  
• Jobless claims likely have been boosted some by the disruptions in the Gulf of Mexico and the flooding problems in the Tennessee area, but should recede slowly.
  
  
• This week's May jobs report is expected to boost optimism. The payroll count is expected to be boosted by about 450,000 of temporary Census jobs. Excluding
  Census hiring, nonfarm payrolls may have increased by 100,000-150,000. The unemployment rate may fall back as some of the unemployed pick up census jobs.
  
  
• Although consumer spending was flat in April, and that spurred some concerns about the outlook for this key sector, it is not well known that the level of real consumer spending reached an all-time high in April, an encouraging sign for the developing economies that depend so much on US markets as an outlet for their exports. Even though consumer spending now accounts for 71% of US GDP and that share is unlikely to rise higher, the consumer has significant upside potential, because the economic recovery will unlock pent-up demand that was bottled up by the recession. This is a dynamic that can describe virtually all economic recoveries.
  
  
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• Dollar funding needs of European financial institutions have pushed 3-month Libor rates up to 54 basis points, as key lenders pull back. The dispersion of Libor quotes has widened, adding to the volatility for this key benchmark lending rate. The latest pressures, however, are a skeleton of the monster strains more than a year ago that drove the 3-month Libor spread up to more than 350 basis points over the Fed’s target rate in the middle of the financial crisis (pages 15 and 17).
  
  
• The upswing in business capital goods investment this year is a sign that businesses are becoming more confident of economic recovery (page 212-214).
  
  
• Housing activity is exaggerated by the impact of the homebuyer credit but probably is improving on an underlying basis. Purchase offers had to be made by the end of April and transactions settled by the end of June to qualify for the homebuyer credit (pages 111 and 122-123).
  
  
• House prices are broadly stabile—rising slightly in the West and still sliding in Florida—now that owning a home has become very affordable again (pages 112-120).
  
  
• The economy grew 3% annualized in the first quarter, defying expectations of an upward revision, as an firmer business spending for equipment was offset by a downward revision to software spending, among other small adjustments (page 149).
  
  
• Jobless claims fell back less than expected. Still, the number receiving benefits from all programs is falling (pages 179, 180). About 450,000 of temporary Census workers were hired in May.
  
  
• Consumer spending was flat in April, but remains on a solid trajectory in Q2 (page 199).
  
  
• Underlying consumer inflation has receded to 1.2%, according to the high-profile chain price index for personal consumption expenditures (pages 239-241).
  
  
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