The holidays were not merry for many retailers, but manufacturing has remained stout. Here are the five things we learned from U.S. economic data released during the week ending January 15.
Retail sales fell for a second straight month in December. Retail and food services sales totaled a seasonally adjusted $540.9 billion, off 0.7 percent from November but up 2.9 percent from a year earlier. The drop in the Census Bureau measure occurred despite rising sales at motor vehicle dealers/parts stores (+1.9 percent) and gas stations (+6.6 percent). Net of both, core retail sales fell 2.1 percent in December but remained 2.6 percent above year-ago levels. For the entire year, retail sales gained 0.6 percent, with the core measure enjoying a +2.4 percent comparable. Among the major categories, sales improved during the month at apparel retailers (+2.4 percent), health/personal care stores (+1.1 percent), and building material/garden stores (+0.9 percent). Sales fell at retailers focused on electronics/appliances (-4.9 percent), groceries (-1.7 percent), sporting goods/hobbies (0.8 percent), and furniture (-0.6 percent). Sales plummeted 3.8 percent at department stores and hemorrhaged 4.5 percent at restaurants/bars.
Manufacturing continued to build traction as 2020 ended. The Federal Reserve indicates that manufacturing output grew a seasonally adjusted 0.9 percent in December (its eighth consecutive increase) but remained 2.8 percent below the year-ago rate. Durable goods production gained 1.0 percent (even as automobile manufacturing slowed 1.6 percent) and that for nondurables advanced 0.9 percent. Overall industrial production rose 1.6 percent in December as both mining and utilities output jumped. Nonetheless, industrial production remained 3.6 percent under December 2019 levels. Factories and other assets remain offline, however, as the capacity utilization rate of 74.5 percent was 5.3 percentage points below the long-term average.
Hiring edged up in November while job separations rose. The Bureau of Labor Statistics estimates there were a seasonally adjusted 6.527 million open jobs at the end of November, down 105,000 from October and 3.9 percent from a year earlier. Most industries reported job openings were down by double-digit percentages, including financial activities, leisure/accommodations, retail, and transportation/warehousing/utilities. Positive outliers included manufacturing, construction, and professional/business services. Employers hired 5.979 million people during the month, up 67,000 from October and 2.1 percent from a year earlier. Hiring bright spots (relative to the prior year) included professional/business services, manufacturing, health care/social assistance, and finance/insurance. 5.413 million left their jobs in November, up 271,000 from October but 4.3 percent behind the year-ago pace. The count of people quitting their jobs held steady for the month at 3.156 million (-10.5 percent versus November 2019) while the count of layoffs surged by 301,000 to 1.973 million (+18.0 percent versus November 2019).
Energy and food consumer prices rose in December (but not much else). The Bureau of Labor Statistics reports that the Consumer Price Index (CPI) grew a seasonally adjusted 0.4 percent during the month. Even though this was the fastest increase in consumer prices since last August, CPI was up only 1.4 percent over the past year. Energy prices rose 4.0 percent with sharp increases for both fuel oil (+10.4 percent) and gasoline (+8.4 percent). Food prices gained 0.4 percent, with sizable advances for nonalcoholic beverages, dairy products, and cereals/bakery products. Net of energy and food, core CPI increased by a modest 0.1 percent during the month (+1.6 percent versus December 2019). Prices grew for apparel (+1.4 percent), new vehicles (+0.4 percent), and shelter (+0.1 percent) but fell for used cars/trucks (-1.2 percent), health care commodities (-0.4 percent) and services (-0.1 percent), and transportation services (-0.1 percent).
Wholesale prices grew, but year-to-year comparables remained modest. The Producer Price Index (PPI) for final demand rose a seasonally adjusted 0.3 percent in December, above November’s advance but matching October’s gain. The Bureau of Labor Statistics measure had a muted 12-month comparable of +0.8 percent. The core measure, which nets out energy, food, and trade services, moved up 0.4 percent (its biggest gain since September) and has risen 1.1 percent over the past year. Energy PPI jumped 5.5 percent (gasoline PPI: +16.1 percent) while food prices slipped 0.1 percent. Core goods PPI grew 0.5 percent. Services PPI pulled back 0.1 percent, which includes trade services PPI (which measure retailer/wholesaler margins) fell 0.8 percent.
Other U.S. economic data released over the past week:
- Jobless Claims (Week ending January 9, First-Time Claims, seasonally adjusted): 965,000, +181,000 vs. the previous week, +758,000 vs. the same week a year earlier). 4-week moving average: 834,250 (+289.4% vs. the same week a year earlier).
- University of Michigan Surveys of Consumers (January 2021-preliminary, Index of Consumer Sentiment, seasonally adjusted): 79.2 (December 2020: 80.7, January 2020: 99.8).
- NFIB Small Business Optimism (December 2020, Index (1986=100), seasonally adjusted): 95.9 (November 2020: 101.4, December 2019: 102.7).
- Import Prices (December 2020, All Imports): +0.9% vs. November 2020, -0.3% vs. December 2019. Nonfuel Imports: +0.4% vs. November 2020, +1.9% vs. December 2019.
- Export Prices (December 2020, All Exports): +1.1% vs. November 2020, +0.2% vs. December 2019. Nonagricultural Exports: +1.3% vs. November 2020, -0.2% vs. December 2019.
- Business Inventories (November 2020, Manufacturers’ and Trade Inventories, seasonally adjusted): $1.960 trillion (+0.5% vs. October 2020, -3.2% vs. November 2019.
- Monthly Treasury Statement (December 2020, Budget Surplus/Deficit Over First 3 Months of FY2021): -$572.9 billion (vs. First 3 Months of FY2020: -$356.6 billion).
- Beige Book
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