Retail sales improved in January but manufacturing output struggled in February. Here are the five things we learned from U.S. economic data released during the week ending March 15.
Retail sales modestly rebounded in January. The Census Bureau estimates U.S. retail and food services sales grew 0.2 percent during the month to a seasonally adjusted $504.4 billion. This compares favorably to December’s 1.6 percent sales slump (revised from a previously reported 1.2 percent drop) and places sales 2.3 percent ahead of January 2018 levels. Sales fell a sharp 2.4 percent at auto dealers/parts stores and 2.0 percent at gas stations. Net of sales at auto dealers/parts stores and gas stations, core retail sales jumped 1.2 percent following a 1.6 percent drop in December and have grown 3.2 percent since January 2018. Growing during the month were sales at sporting goods/hobby retailers (+4.8 percent), building material/garden stores (3.3 percent), health/personal care stores (+1.6 percent), grocery stores (+1.2 percent), general merchandisers (+0.8 percent), and restaurants/bars (+0.7 percent). Sales declined at stores focused on apparel (-1.3 percent), furniture (-1.2 percent), and electronics/appliances (-0.3 percent).
Manufacturing production dropped for the second straight month in February. The Federal Reserve reports the manufacturing output fell 0.4 percent on a seasonally adjusted basis, following a 0.5 percent drop in January. Durable goods production slipped 0.1 percent (matching the modest decline in motor vehicle production) while nondurable goods output declined 0.7 percent as production fell for petroleum/coal products, apparel, and printing. Overall industrial production increased 0.1 percent as the manufacturing slowdown was counterbalanced by increased utilities (+3.7 percent) and mining (+0.3 percent) output. Over the past year, manufacturing output has grown a modest 1.0 percent while overall industrial production has risen 3.5 percent.
Employers continued struggling to fill open jobs during January. There were a seasonally adjusted 7.581 million open nonfarm jobs at the end of January, up 102,000 from December and 15.0 percent above year-ago levels. Further, the Bureau of Labor Statistics’ count of open positions was well above the 6.535 million people who had reported being unemployed during the same month. Among the industries reporting large year-to-year percentage increases in job openings were wholesale trade (+32.5 percent), construction (+23.3 percent), health/social assistance (+21.0 percent), professional/business services (+19.5 percent), accommodation/food services (+19.1 percent), and financial activities (+15.3 percent). Lagging behind the growth in new job openings was hiring, which grew by 84,000 to 5.801 million workers. This was 5.0 percent ahead of the January 2018 pace of hiring. 5.550 million people left their jobs in January, up 81,000 for the month and 4.4 percent from a year earlier. Indicative of confident workers, 3.490 million quit their jobs voluntarily (+15.5 percent versus January 2018) while the count of people laid off—1.723 million—was 10.9 percent year-ago layoff activity
Inflation measures remained under control in February. The Bureau of Labor Statistics reports the Consumer Price Index (CPI) grew 0.2 percent on a seasonally adjusted basis during the month, its first increase since October. Pulling up the headline number were 0.4 percent gains for both food and energy. The latter included the first increase in gasoline prices since October (+1.5 percent). Net of food and energy, core CPI advanced 0.1 percent, its smallest increase since last August. While prices for shelter and apparel each grew 0.3 percent, falling were prices for medical care commodities (-1.0 percent), used cars/trucks (-0.7 percent), new vehicles (-0.2 percent), and transportation services (-0.1 percent). Over the past year, CPI has risen 1.5 percent while the core measure has a 12-month comparable of +2.1 percent.
Meanwhile, the Producer Price Index (PPI) for final demand grew for the first time in four months with a 0.1 percent seasonally adjusted increase in February, per the Bureau of Labor Statistics. The core measure of wholesale prices, which removes the impact of energy, food and trade services, also grew 0.1 percent for the month. Energy prices increased for only the third time in eight months with a 1.8 percent gain (including a 3.3 percent advance in wholesale gasoline prices). PPI for final demand food slumped 0.3 percent. PPI for final demand goods gained 0.4 percent while that for final demand services was unchanged. Final demand PPI has risen 1.9 percent, the first time since June 2017 in which the 12-month comparable has fallen under two percent. The core measure for wholesale prices has grown 2.3 percent over the past year.
Durable goods orders grew for a third straight month in January. The Census Bureau tells us that new orders for manufactured durable goods grew 0.4 percent to a seasonally adjusted $255.3 billion. Transportation goods orders rose 1.2 percent, with increases for civilian (+15.9 percent) and defense aircraft (+4.5 percent) and a 1.0 percent slowdown in motor vehicle orders. Net of transportation goods, durable goods orders slipped 0.1 percent. Rising were orders for computers (+7.6 percent), communications equipment (+3.8 percent), electrical equipment/appliances (+1.7 percent), and machinery (+1.4 percent). New orders for primary metals slumped 1.5 percent. New orders for civilian non-aircraft capital goods—a proxy for business investment—gained 0.8 percent.
Other U.S. economic data released over the past week:
– Jobless Claims (week ending March 9, 2019, First-Time Claims, seasonally adjusted): 229,000 (+6,000 vs. previous week; +3,000 vs. the same week a year earlier). 4-week moving average: 223,750 (+0.4% vs. the same week a year earlier).
– Import Prices (February 2019, All Imports, not seasonally adjusted): +0.6% vs. January 2019, -1.3% vs. February 2018. Nonfuel Imports: Unchanged vs. January 2019, -0.6% vs. February 2018.
– Export Prices (February 2019, All Exports, not seasonally adjusted): +0.6% vs. January 2019, +0.3% vs. February 2018. Nonagricultural Exports: +0.7% vs. January 2019, +0.3% vs. February 2018.
– State Employment (January 2019, Nonfarm Payrolls, seasonally adjusted): Vs. December 2018: Payrolls grew in 13 states and were essentially unchanged in 37 states and the District of Columbia. Vs. January 2018: Payrolls grew in 26 states and were essentially unchanged 24 states and the District of Columbia.
– New Home Sales (January 2019, New Homes Sold, seasonally adjusted annualized rate): 607,000 (-6.9% vs. December 2018, -4.1% vs. January 2018).
– Business Inventories (December 2018, Manufacturers’ and Trade Inventories, seasonally adjusted): $1.995 trillion (+0.6% vs. November 2018, +4.8% vs. December 2017).
– Small Business Optimism Index (February 2019, Index (1986=100), seasonally adjusted): 101.7 (vs. January 2019: 101.2, vs. February 2018: 107.6).
– Construction Spending (January 2019, Value of Construction Put in Place, seasonally adjusted annualized rate): $1.279 trillion (+1.3% vs. December 2018, +0.3% vs. January 2018).
– University of Michigan Surveys of Consumers (March 2019-preliminary, Index of Consumer Sentiment (100=1966Q1), seasonally adjusted): 97.8 (vs. February 2019: 93.8, vs. March 2018: 101.4).
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What We Learned About the U.S. Economy Last Week 