by Calculated Risk on 5/31/2011 10:58:00 AM

• From the Chicago Business Barometer™ Dropped: The overall index decreased to 56.6 from 67.6 in April. This was below consensus expectations of 62.3. Note: any number above 50 shows expansion.

"Breadth of EMPLOYMENT expansion softened but remained strong." The employment index decreased to a still strong 60.8 from 63.7. The new orders index decreased to 53.5 from 66.3.

• From the Dallas Fed: Texas Manufacturing Activity Expands

Texas factory activity increased in May, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose from 8 to 13 with 27 percent of respondents noting output increased from April.

Other measures of current manufacturing conditions also indicated growing activity, although the pace of new orders slowed. ... Labor market indicators reflected more hiring and longer workweeks. The employment index came in at 12, with the share of manufacturers adding workers reaching its highest level this year. The hours worked index jumped up from -1 in April to 13 in May.

This is the last of the regional Fed surveys for May. The regional surveys provide a hint about the ISM manufacturing index - and most of the regional surveys were weak this month as the following graph shows.

Click on graph for larger image in graph gallery.

The New York and Philly Fed surveys are averaged together (dashed green, through May), and averaged five Fed surveys (blue, through May) including New York, Philly, Richmond, Dallas and Kansas City. The Institute for Supply Management (ISM) PMI (red) is through April (right axis).

The regional surveys suggest the ISM manufacturing index will fall to the mid-50s or so. The ISM index for May will be released tomorrow, June 1st, and expectations are for a decrease to 57.5 from 60.4 in April (I think the consensus is too high).

Earlier ...
• Case Shiller: National Home Prices Hit New Low in 2011 Q1