The retail picture improved while employers continue to struggle filling open positions. Here are the five things we learned from U.S. economic data released during the week ending June 14.
Retail sales firmed in May, with an upward revision for April. Retail and food services sales grew 0.5 percent to a seasonally adjusted $519.0 billion, up 3.2 percent since May 2018. The Census Bureau also upwardly revised its April sales estimate from a previously reported 0.2 percent sales drop to a 0.3 percent gain. Sales blossomed at both auto dealers/parts stores (+0.7 percent) and gas stations (+0.3 percent). Netting out both, core retail sales also gained 0.5 percent for the month and 3.2 percent over the past year. Sales increased during May at retailers focused on electronics/appliances (+1.1 percent), sporting goods/hobbies (+1.1 percent), health/personal care (+0.6 percent), and building materials (+0.1 percent). May was not as good of a month for department stores (-0.7 percent) and food/beverage stores (-0.1 percent).
Employers continued posting a near-record number of job openings in April. The Bureau of Labor Statistics reports that there were a seasonally adjusted 7.449 million job openings on the final day of April, off 25.000 from the prior month but up 4.8 percent from a year earlier. (By comparison, a separate BLS report indicates that there were “only” 5.824 million unemployed people in April.) Industries reporting significant year-to-year percentage increases in openings were construction (+56.6 percent), financial activities (+11.3 percent), and manufacturing (+11.1 percent), while job openings in retail slumped 18.9 percent. Employers hired 5.937 million workers in Apri1, up 240,000 from March and 4.3 percent from a year earlier. 5.578 million people left their jobs in April, up 70,000 for the month and 2.0 percent over the previous year. This included 3.482 million people quitting their jobs during the month (+4.3 percent versus April 2018) and 1.752 million being laid off (-2.0 percent versus April 2018).
Manufacturing output grew in May for the first time since January. The Federal Reserve reports that manufacturing production expanded a seasonally adjusted 0.2 percent during the month, following a 0.5 percent drop during the previous month. Durable goods production gained 0.3 percent, boosted by jumps for wood products, machinery; electrical equipment/appliances, and motor vehicles. The output of nondurables eked out a 0.1 percent bump. Manufacturing output has expanded by only 0.7 percent over the past 12 months. Overall industrial production grew 0.4 percent during the month, rebounding from a 0.4 percent drop in April and leaving the measure up 2.0 percent over the past year. Mining output increased 0.1 percent during the month while production at utilities rose 2.1 percent.
Headline inflation was soft in May. The Consumer Price Index (CPI) increased by a modest 0.1 percent on a seasonally adjusted basis during the month, following gains of 0.3 percent and 0.4 percent during the two prior months. The Bureau of Labor Statistics report also notes that consumer energy prices fell 0.6 percent (gasoline CPI: -0.5 percent) while food prices jumped 0.5 percent (thanks to higher prices for non-alcoholic beverages and meat/poultry/fish/eggs). Net of both energy and food, core CPI grew by a 0.1 percent for the fourth consecutive month. Prices rose for medical care services (+0.5 percent), shelter (+0.2 percent), new vehicles (+0.1 percent) but fell for used cars/trucks (-1.4 percent) and medical care commodities (-0.4 percent). CPI has risen 1.8 percent over the past 12 months, while core CPI has gained 2.0 percent over the same period.
The Producer Price Index (PPI) for final demand edged up a seasonally adjusted 0.1 percent, its smallest increase over the past four months. Core PPI for final demand, which removes the impact of food, energy, and trade services, climbed 0.4 percent (matching its increase in April). Final demand goods PPI dropped 0.2 percent, pulled down by declines in wholesale prices for both energy (-1.0 percent) and food (-0.3 percent). Final demand services PPI grew 0.3 percent, thanks to higher prices for transportation/warehouse services. Headline PPI has risen 1.8 percent over the past year while the core measure has a more robust 12-month comparable of +2.3 percent.
Small business owner confidence improved for a fourth straight month in May. The Small Business Optimism Index added 1.5 points during the month to a seasonally adjusted reading of 105.0 (1986=100). This was the highest mark for the National Federation of Independent Business’ measure since last October. Six of the ten index components gained in May, led by whether it is a good time to expand, plans to make capital outlays, expectations for the economy, and expected real sales. Only one index component—expected credit conditions—slipped during the month. The press release noted that “[s]mall business owners are demonstrating a continued confidence in the strength of the economy.”
Other U.S. economic data released over the past week:
– Jobless Claims (week ending June 8, 2019, First-Time Claims, seasonally adjusted): 222,000 (+3,000 vs. previous week; -3,000 vs. the same week a year earlier). 4-week moving average: 217,750 (-1.8% vs. the same week a year earlier).
– University of Michigan Surveys of Consumers (June 2019, Index of Consumer Sentiment (100=1966Q1), seasonally adjusted): 97.9 (May 2019: 100.0, June 2018: 98.2)
– Business Inventories (April 2019, Manufacturers’ and Trade Inventories, seasonally adjusted): $2.230 trillion (+0.5% vs. March 2019, +5.3% vs. April 2018).
– Monthly Treasury Statement (1st 8 months of FY19 (May 2019), Budget Surplus/Deficit): -$738.6 billion (vs. 1st 8 months of FY18: -$532.2 billion).
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