December was only merry for some retail sectors, but small business owners did grow more confident. Here are the 5 things we learned from U.S. economic data released during the week ending January 13.
2016 ended well for some but not all retailers. The Census Bureau estimates retail and food services sales increased 0.6% during December to a seasonally adjusted $469.1 billion. This was 4.1% above the year ago sales pace and was thanks partially to a 2.4% surge in sales at auto dealers and part stores. When you remove activity at auto dealers and parts stores, sales edged up only 0.2% (+3.4% vs. December 2015). Retail sales grew during the month at gas stations (+2.0%, thanks to higher prices at the pump), furniture stores (+0.5%), building material/garden stores (+0.5%), health & personal care stores (+0.3%), and sporting goods/hobby retailers (+0.2%). Sales slumped 0.6% at department stores while electronics/appliance retailers suffered a 0.5% sales decline. Restaurants and bars also saw sales dropping 0.8% during December. One bright spot was at nonstore retailers (e.g., internet sellers), where sales jumped 1.3% during the month and were 13.2% above the December 2015 pace. To get a sense of the health of the 2016 holiday season: retail sales between October and December were 4.1% above that for the same 3 months in 2015. Retail sectors with the largest year-to-year holiday sales comparisons were nonstore retailers (+12.8%), health/personal care (+6.6%), auto dealers/parts stores (+5.2%), and building materials/garden (+4.3%). Less merry during the holiday season were department stores (-7.6%), electronics/appliance stores (-3.7%), and sporting goods/hobby retailers (-2.1%).
Both the count of job openings and the pace of hiring increased slightly in November. The Bureau of Labor Statistics estimates that there were a seasonally adjusted 5.522 million job openings at the end of November, up 71,000 for the month and 6.2% above the November 2015 reading. Industries with the largest year-to-year percentage gains in job openings included construction (+82.2%), manufacturing (+36.1%), retail trade (+23.9%), mining (+13.3%), and government (+12.5%). Employers hired 5.219 million people during November, a 59,000 increase in hiring for the month but 0.6% below its year ago reading. Industries with the largest year-to-year percentage gains in hiring included transportation/warehousing (+14.5%), government (+6.3%), and leisure/hospitality (+4.9%). Separations increased by 62,000 during the month to 5.028 million (+1.4% vs. November 2015). Voluntary quits were 8.4% above their November 2015 level, suggesting workers were confident about their job prospects. Over the same 12-month period, the count of layoffs had declined 3.8%.
Wholesale prices continued to heat up in December. Per the Bureau of Labor Statistics, the final demand Producer Price Index (PPI) grew 0.3% on a seasonally adjusted basis during the month following a 0.4% gain in November. The measure has increased 1.6% over the past 12 months. The index same measure net of energy, food, and trade services grew at a more modest 0.1% (+1.7% vs. December 2015). Final demand PPI jumped 0.7% (its largest increase since last June) sparked by a 2.6% gain in energy PPI and a 0.7% bounce in food PPI. In the case of the former, wholesale gasoline prices surged 7.8%. Net of both energy and food, final demand PPI for core goods gained 0.3% during December. Meanwhile, PPI for demand services inched up 0.1%
Small business owner confidence surged in December. Matching gains in consumer sentiment and perhaps reflecting the political preferences of the survey’s sponsor, the Small Business Optimism Index jumped 7.4 points during the month to a seasonally adjusted reading of 105.8 (1986 = 100). The last time the National Federation Independent Business measure had been this high was back in 2004. 7 of 10 index components improved from the November readings, led by large gains for indices tracking expected economic conditions (up 38 points to +5), expected real sales (up 20 points to +31), whether “it is a good time to expand” (up 12 points to +23), and whether it is “a good time to make capital outlays” (up 5 points to +29). Only 2 of the index components declined during the month: current job openings (off 2 points to +29) and expected credit conditions (off a point to -6). The press release says that the findings indicate that “[s]mall business is ready for a breakout” as nearly half of the gain in the index due to expectations for “better business conditions” because of the election.
Consumer credit balances expanded by $24.6 billion during November. The Federal Reserve reports that outstanding consumer credit balances (net of mortgages and other real estate-backed loans totaled $3.750 trillion, up 6.3 from a year earlier. The expansion of revolving credit (e.g., credit cards) balances sped up during the month—they increased $11.0 billion during November following a $2.4 billion gain in October. The $992.4 billion total was 6.4% above its November 2015 reading. Nonrevolving credit balances grew by $13.5 billion during the month to $2.758 trillion (+6.2% vs. November 2015).
Other U.S. economic data released over the past week:
– Jobless Claims (week ending January 7, 2017, First-Time Claims, seasonally adjusted): 247,000 (+10,000 vs. previous week; -33,000 vs. the same week a year earlier). 4-week moving average: 256,500 (-7.7% vs. the same week a year earlier).
– University of Michigan Index of Consumer Sentiment (January 2017-preliminary, Index (1966Q1 = 100, seasonally adjusted): 98.1 (-0.1 vs. December 2016, +6.1 vs. January 2016).
– Business Inventories (November 2016, Manufacturing & Trade Inventories, seasonally adjusted): $1.828 trillion (+0.7% vs. October 2016, +1.5% vs November 2015).
– Import Prices (December 2016, seasonally adjusted): +0.4% vs. November 2016, +1.8% vs. December 2015. Nonfuel imports: -0.2% vs. November 2016, -0.1% vs. December 2016.
– Export Prices (December 2016, seasonally adjusted): +0.3% vs. November 2016, +1.1% vs. December 2015.
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What We Learned About the U.S. Economy Last Week 