Just about everything declined in April. Here are the five things we learned from U.S. economic data released during the week ending May 15.
Retail sales fell hard in April. The Census Bureau estimates retail and food establishment sales hemorrhaged 16.4 percent to a seasonally adjusted $403.9 billion. This was 21.5 percent under April 2019 sales totals. Sales tumbled 12.4 percent at auto dealers and 22.8 percent at gas stations. Net of both, core retail sales were 16.2 percent behind that from March. Virtually every retail segment suffered double-digit sales declines: apparel (-78.8 percent), electronics/appliances (-60.6 percent), furniture (-58.7 percent), sporting goods/hobby (-38.0 percent), restaurants/bars (-29.5 percent), department stores (-28.9 percent), health/personal care (-15.2 percent), and groceries (-13.2 percent). The only retail segment to report a sales gain was nonstore retailers (e.g., internet retailers) with an 8.4 percent advance.
Industrial production suffered its biggest decline in more than a century in April. Industrial production nosedived 11.2 percent as factories closed or slowed production. This was the biggest single-month decline ever in the 101-year history for the Federal Reserve data series. Manufacturing output slumped 13.7 percent, following March’s 5.5 percent drop. Durable goods production slowed 19.3 percent, hurt by (among other things) a nearly total stoppage in automobile output, and significant declines for primary metal products, aerospace equipment, and furniture. Nondurables production decelerated 8.2 percent with sharp drops for textiles mills, apparel/leather, printing, and petroleum/coal products. Utility output slowed 0.9 percent while mining output sank 6.1 percent with oil and gas well drilling seeing its biggest decline in the 48-year data series’ history.
Consumer and wholesale prices tumbled in April. The Consumer Price Index (CPI) dropped a seasonally adjusted 0.8 percent during the month, following a 0.4 percent decline in March, per the Bureau of Labor Statistics. Energy prices plummeted 10.1 percent, with gasoline prices diving 20.6 percent. Meanwhile, food prices jumped 1.5 percent. Net of energy and food, core CPI declined 0.4 percent, pulled down by price drops for apparel (-4.7 percent), transportation services (-4.7 percent), used cars/trucks (-0.4 percent), and medical care commodities (-0.1 percent). Medical care services prices gained 0.5 percent. Headline CPI has risen a mere 0.3 percent over the past year, but core CPI has a 12-month comparable of +1.4 percent. The BLS noted its difficulties collecting price data since mid-March.
Meanwhile, the Producer Price Index (PPI) for final demand fell for the third consecutive month with a seasonally adjusted 1.3 percent decline. The Bureau of Labor Statistics’ core wholesale price measure, which nets out foods, energy, and trade services, pulled back 0.9 percent. Energy PPI plunged 19.0 percent (wholesale gasoline prices: -56.6 percent), while food PPI decreased 0.5 percent. Core goods PPI (net of energy and food) fell 0.4 percent. Trade services PPI rose 1.6 percent. Wholesale prices have fallen 1.2 percent over the past year, while the core measure was off 0.3 percent from April 2019.
Small business owner sentiment weakened again in April. The Small Business Optimism Index from the National Federation of Independent Business lost 5.5 points during the month to a seasonally adjusted 90.9 (1986=100). Over the past two months, the index shed 13.6 points to its lowest reading since March 2013. Nine of ten index components fell during the month, including double-digit drops for measures linked to expected real sales, earnings trends, current job openings, and whether it is a good time to expand. The one measure that advanced in April tracked expected economic conditions.
Job openings and hiring slowed, separations skyrocketed in March. The Bureau of Labor Statistics estimates there were a seasonally adjusted 6.191 million open jobs at the end of the month, down 813,000 from February, off 15.9 percent from the same month a year earlier, and the fewest reported since May 2017. Industries with sharp double-digit year-to-year percentage declines in job openings included leisure/hospitality (-31.6 percent), construction (-31.4 percent), manufacturing (-27.4 percent), trade/transportation/utilities (-15.9 percent), and health care/social assistance (-12.0 percent). There were 5.206 million hires in March, down 658,000 for the month, and 8.5 percent from a year earlier. Meanwhile, job separations surged by more than 8.9 million to 14.517 million (+161.4 percent versus March 2019). Layoffs swelled 569.7 percent from a year earlier to 11.372 million.
Other U.S. economic data released over the past week:
– Jobless Claims (Week ending May 2, First-Time Claims, seasonally adjusted): 2,981,000 (-195,000 vs. the previous week, +2,764,000 vs. the same week a year earlier). 4-week moving average: 3,616,500 (+1,510.9% vs. the same week a year earlier).
– University of Michigan Surveys of Consumers (May 2020-preliminary, Index of Consumer Sentiment (1966Q1=100), seasonally adjusted): 73.7 (vs. April 2020=71.8, vs. May 2019=100.0).
– Import Prices (April 2020, All Imports): -2.6% vs. March 2020, -6.8% vs. April 2019. Nonfuel Imports: -0.5% vs. March 2020, -1.0% vs. April 2019.
– Export Prices (April 2020, All Exports): -3.3% vs. March 2020, -7.0% vs. April 2019. Nonagricultural Exports: -3.3% vs. March 2020, -7.3% vs. April 2019.
– Business Inventories (March 2020, Manufacturers and Trade Inventories, seasonally adjusted): $2.013 trillion (-0.2% vs. February 2020, -0.3% vs. March 2019).
– Treasury Budget (April 2020, Deficit Over First Seven Months of FY2020): -$1.481 trillion (+179.0% vs. First Seven Months of FY2019).
– Treasury International Capital (March 2020, Net Foreign Purchases of U.S. Securities, not seasonally adjusted): -$238.1 billion (vs. February 2020: +$14.4 billion, vs. March 2019: -$21.5 billion).
The opinions expressed here are not necessarily those of Kevin’s current employer. No endorsements.