The U.S. economy appears to be shifting into a lower gear with residential construction falling sharply and manufacturing activity slowing.
The Commerce Department reported Thursday that residential home building dropped by 1.1 percent in April, the biggest decrease since January 2004. A second report from the Institute of Supply Management showed that its closely watched gauge of manufacturing activity turned in a weaker-than-expected reading of 54.4 in May.
In other economic news, productivity of American workers rebounded at a rapid clip at the start of this year and wages posted a solid gain as well. The Labor Department said that productivity, the key factor in rising living standards, rose at an annual rate of 3.7 percent in the January-March quarter, better than the 3.2 percent increase initially estimated a month ago. Salaries and benefits per unit of output rose by 1.6 percent after having fallen by 0.6 percent in the fourth quarter.
