Consumers continued spending money in August, but Hurricane Ida hit manufacturing. Here are the five things we learned from U.S. economic data released during the week ending September 17.
Retail sales were resilient in the face of Delta. The Census Bureau estimates retail and food services sales jumped 0.7 percent in August to a seasonally adjusted $618.7 billion. Sales were 15.1 percent ahead of year-ago levels. Sales during June to August were off 0.7 percent from the preceding three-month period (March-May) but up 16.3 percent versus the comparable period in 2020. Sales at auto dealers and parts stores slumped 3.6 percent in August, while those at gas stations inched up 0.2 percent. Net of both, core retail sales surged 2.0 percent during the month and were 14.3 percent ahead of their year-ago pace. Sales advanced at retailers focused on furniture (+3.7 percent), groceries (+2.1 percent), building materials (+0.9 percent), health/personal care (+0.2 percent), and apparel (+0.1 percent). Sales plummeted at electronics/appliance retailers (-3.1 percent) and sporting goods/hobby stores (-2.7 percent). While sales at restaurants/bars were flat for the month, they were 31.9 percent above year-ago levels.
Slower growth for the manufacturing sector in August. The Federal Reserve indicates that manufacturing output increased a seasonally adjusted 0.2 percent during the month, following a 1.6 percent bounce in July. Manufacturing output (hurt slightly by Hurricane Ida) was up 5.9 percent from a year earlier and 1.0 percent ahead of its pre-pandemic peak. Production of durable and nondurable goods both grew 0.1 percent. Overall industrial production advanced 0.4 percent during the month (and was 5.0 percent above year-ago levels). Mining output slowed 0.9 percent (as Ida led to oil extraction shutdowns), while utility output jumped 3.3 percent (boosted by the hot summer weather).
Inflation mellowed in August. The Bureau of Labor Statistics reports the Consumer Price Index (CPI) grew a seasonally adjusted 0.3 percent during the month. This was the smallest gain in consumer prices since January. Energy CPI rose 2.0 percent (gasoline prices: +2.8 percent) while food CPI jumped 0.4 percent. Net of energy and food, core CPI edged up 0.1 percent (its smallest rise since February). Prices grew for new vehicles (+1.2 percent), apparel (+0.4 percent), medical care services (+0.3 percent), and shelter (+0.2 percent). Falling were prices for transportation services (-2.3 percent), used cars/trucks (-1.5 percent), and medical care commodities (-0.2 percent). Consumer prices have risen 5.3 percent over the past year, while core CPI has a 12-month comparable of +4.0 percent.
Consumer optimism inched up in early September. The University of Michigan’s Index of Consumer Sentiment grew by 7/10ths of a point in early September to a seasonally adjusted reading of 71.0. Even with the gain, the index remained under its early pandemic low. The current conditions index shed 1.4 points to 77.1 while the expectations index increased by 2.0 points to 67.1. The press release noted that survey respondents’ view of long-term economic prospects “fell to a decade low.” Look for a revision to the September results next week.
The same occurred with small business owner sentiment in August. The Small Business Optimism Index, from the National Federation of Independent Business, added 4/10ths of a point during the month to a seasonally adjusted reading of 100.1 (1986=100). This followed July’s 2.8 point drop. Five of the index’s ten components improved during the month, led by measures for plans associated with hiring, growing inventories, and make capital outlays. Four measures declined, with a significant drop in expected economic conditions. The press release noted small businesses’ “biggest problems” deal with an inability to hire workers and supply chain issues.
Other U.S. economic data released over the past week:
- Jobless Claims (Week ending September 11, 2021, First-Time Claims, seasonally adjusted): 332,000, +20,000 vs. the previous week, -528,000 vs. the same week a year earlier). 4-week moving average: 335,750 (-61.5% vs. the same week a year earlier).
- Import Prices (August 2021, All Imports, not seasonally adjusted): -0.3% vs. July 2021, +9.0% vs. August 2020. Nonfuel Imports: -0.1% vs. July 2021, +5.6% vs. August 2020.
- Export Prices (August 2021, All Exports, not seasonally adjusted): +0.4% vs. July 2021, +16.8% vs. August 2020. Nonagricultural Exports: +0.2% vs. July 2021, +14.9% vs. August 2020.
- State Employment (August 2021, Nonfarm Payrolls, seasonally adjusted): Grew in 11 states, decreased in 3 states, and held steady in 36 states and the District of Columbia vs. July 2021. Grew in 49 states and the District of Columbia and held steady in 1 state vs. August 2020.
- Monthly Treasury Statement (August 2021—1st 11 Months of FY2021, Federal Budget Deficit): -$2.711 trillion (vs. 1st 11 Months of FY2020: -$3.007 trillion.
- Treasury International Capital Flows (July 2021, Net Foreign Purchase of U.S. Securities, not seasonally adjusted): -$14.4 billion (vs. June 2021: +$72.6 billion, vs. July 2020: -$26.1 billion).
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