Autos Fuel Retail Sales, Prices Firm: September 9 – 13

Consumers were buying vehicles in August. Here are the five things we learned from U.S. economic data released during the week ending September 13.

#1Auto sales outpaced an otherwise modest retail sales report for August. The Census Bureau reports that retail and food services sales totaled $526.1 billion, up 0.4 percent from July and 4.1 percent from a year earlier. Sales at auto dealers and parts stores jumped 1.8 percent while those at gas stations fell 0.9 percent (due to lower prices at the pump). Net of both, core retail sales grew a tepid 0.1 percent following a 0.9 percent surge in July (12-month comparable: +4.2 percent). Sales rose during the month at building material/garden stores (+1.4 percent), sporting goods/hobby retailers (+0.9 percent), and health/personal care stores (+0.7 percent). Sales slumped, however, at department stores (-1.1 percent), furniture retailers (-0.5 percent), and grocery stores (-0.3 percent).

#2Core consumer prices rose for a third straight month in August. The Consumer Price Index (CPI) grew 0.1 percent on a seasonally adjusted basis for the third time over the past four months, per the Bureau of Labor Statistics. Energy CPI fell 1.9 percent (pulled down by a 3.5 percent drop in gasoline prices) while food CPI held steady. Net of both, core CPI grew 0.3 percent for a third consecutive month. Rising were prices for used cars/trucks (+1.1 percent), medical care services (+0.9 percent), transportation services (+0.4 percent), medical care commodities (+0.3 percent), apparel (+2.2 percent), and shelter (+0.2 percent). Prices slipped 0.1 percent for new vehicles. While headline CPI has grown by “only” 1.7 percent over the past year, the core measure of consumer prices has climbed 2.4 percent over the same 12 months.

#3And wholesale prices firmed too. The Bureau of Labor Statistics indicates that the Producer Price Index (PPI) for final demand increased 0.1 percent on a seasonally adjusted basis in August after rising 0.2 percent in July. The core measure—PPI net of energy, food, and trade services—jumped 0.4 percent after slipping 0.1 percent during the prior month. PPI for final demand goods dropped 0.5 percent, pulled down by declines for both energy (-2.5 percent—gasoline prices plummeted 6.6 percent) and food (-0.6 percent). Core goods PPI was unchanged for the month. PPI for final demand services grew 0.3 percent—but more notable was the core measure (which nets out trade services and transportation/warehousing) growing 0.5 percent. Over the past year, headline PPI has risen 1.8 percent while the 12-month comparable for the core wholesale prices was +1.9 percent.

#4The number of job openings pulled back slightly, but workers continued to quit their jobs. The Bureau of Labor Statistics estimates that there were a seasonally adjusted 7.217 million open jobs on the final day of July. While still near the historical high for the data series, this was off 31,000 from June and 3.0 percent from a year earlier. While both construction (+18.8 percent) and manufacturing (+7.0 percent) had sizable year-to-year percentage increases in job openings, other industries reported negative 12-month comparables: financial activities (-15.3 percent), retail trade (-15.2 percent), and accommodation/food services (-10.2 percent). Hiring picked up during July, rising by 237,000 to 5.953 million (+2.1 percent versus July 2018). 5.759 million people departed their jobs during the same month, up 246,000 from June and 1.5 percent ahead of the year-ago pace. This included 3.592 million people who voluntarily quit their jobs (up 130,000 for the month and 4.3 percent from July 2018), a signal suggesting Americans remain confident about the labor market. 1.799 million left their jobs due to a layoff, up 88,000 for the month but down 3.2 percent from a year earlier.

#5The federal budget deficit crossed the trillion dollar threshold, and the fiscal year is not even over yet. The Department of the Treasury reports that the U.S. government has collected $3.088 trillion in receipts through the first 11 months of FY2019, up 3.5 percent from the same 11-month period last year. Expenditures, however, have grown 7.0 percent over the same period to $4.155 trillion. The resulting budget deficit of $1.067 trillion was 18.9 percent ahead of that from the first 11 months of FY2018. Year-to-date individual income tax revenues were 0.9 percent ahead of that a year earlier while corporate tax receipts have expanded 4.5 percent. Among the notable gainers in expenditures were defense (+9.0 percent), debt service (+9.0 percent), and health & human services (+8.4 percent)

Other U.S. economic data released over the past week:
Jobless Claims (week ending September 7, 2019, First-Time Claims, seasonally adjusted): 204,000 (-15,000 vs. previous week; -4,000 vs. the same week a year earlier). 4-week moving average: 212,500 (+0.3% vs. the same week a year earlier).
Import Prices (August 2019, All Imports, not seasonally adjusted): -0.5% vs. July 2019, -2.0% vs. August 2018; Nonfuel Imports: Unchanged vs. July 2019, -1.0% vs. August 2018.
– Export Prices (August 2019, All Exports, not seasonally adjusted): -0.6% vs. July 2019, -1.4% vs. August 2018; Nonagricultural Exports: -0.4% vs.
NFIB Small Business Optimism (August 2019, Index (1986=100), seasonally adjusted): 103.1 (vs. July 2019: 104.7, August 2018: 108.8).
University Surveys of Consumers (September 2019-preliminary, Index of Consumer Sentiment (1966Q1=100), seasonally adjusted): 92.0 (vs. August 2019: 89.8, vs. September 2018: 100.1).
Business Inventories (July 2019, Manufacturers’ and Trade Inventories, seasonally adjusted): $2.043 trillion (+0.4% vs. June 2019, +4.8% vs. July 2018).
Consumer Credit (July 2019, Outstanding Consumer (non-real estate-backed) Loan Balances, seasonally adjusted): $4.123 trillion (+$23.3 billion vs. June 2019, +5.2% vs. July 2018).

The opinions expressed here are not necessarily those of Kevin’s current employer. No endorsements are implied.

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