Macro Briefing: 23 May 2025

US economic activity slowed for second month in April, according to the Chicago Fed’s National Activity Index: “Three of the four broad categories of indicators used to construct the index decreased from March, and three categories made negative contributions in April. The index’s three-month moving average, CFNAI-MA3, was unchanged at +0.05 in April.”

US business activity picked up in May, based on the Composite PMI, a survey based GDP proxy. “US business activity growth and expectations for future output improved from lows seen in April,” reported S&P Global. “However, they both remained historically subdued amid ongoing concerns over the detrimental impact of tariffs on demand, supply chains, and prices.”

Existing home sales in the US dropped in April, falling to the slowest pace since 2009. “Home sales have been at 75% of normal or pre-pandemic activity for the past three years, even with seven million jobs added to the economy,” said Lawrence Yun, chief economist at the National Association of Realtors. “Pent-up housing demand continues to grow, though not realized. Any meaningful decline in mortgage rates will help release this demand.”

US jobless claims edged down last week, holding at relatively low level. The subdued number of new filings for unemployment benefits points to an upbeat outlook for the labor market in the near term.