Data showing a double-dip in home prices, pessimistic consumers and a slowdown in regional manufacturing raised concerns on Tuesday that the U.S. economy's soft patch could become protracted, according to Reuters. "The question is, 'Is the softer data we're seeing transitory, or is it likely to persist throughout the remainder of 2011?' Right now, that's an open question that investors are trying to figure out," said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut. The U.S. economy grew at a tepid 1.8 percent annual rate in the first three months of the year, and these fresh signs suggest the recovery is still struggling to gain momentum. A drop in a barometer of business activity in the U.S. Midwest added to other regional reports that have pointed to slower growth in manufacturing this month amid supply chain disruptions from the major earthquake in Japan in March. The Institute for Supply Management-Chicago business barometer dropped to 56.6 in May from 67.6 in April, its lowest reading since November 2009 and missing forecasts for a reading of 62.6. The index of new orders sank to 53.5 from 66.3, while the employment component fell to 60.8 from 63.7. The consumer also appears to be struggling with data last week showing consumer spending was crimped by high gasoline prices in April. Tuesday's manufacturing data bodes poorly for a national factory report due on Wednesday, and casts a cloud ahead of a report on national employment on Friday. "While weakness in manufacturing may simply reflect auto parts shortages, this is the fifth regional manufacturing index to fall sharply in May," wrote Chris Low, chief economist at FTN Financial. "(It) reinforces the general sense the economy is losing steam," he added. U.S. stocks trimmed some gains after the consumer confidence and manufacturing data, but Wall Street was higher in midday trading as the data was outweighed by optimism that new financial aid for debt-laden Greece was on the horizon.
