Retail sales and inflation rose in March. Here are the five things we learned from U.S. economic data released during the week ending April 15.
Retail sales could not keep pace with price rises. Retail and food services sales grew 0.5 percent in March to a seasonally adjusted $665.7 billion. The Census Bureau does not adjust this data series for price variation, and the sales gain did not keep pace with inflation, as noted below. Sales at gas stations rose 8.9 percent but fell 1.9 percent at auto and parts dealers. Net of both, core retail sales moved up 0.2 percent. Sales grew all most every major retailer category: general merchandise (+5.4 percent), electronics/appliances (+3.3 percent), sporting goods/hobbies (+3.3 percent), groceries (+1.3 percent), restaurants/bars (+1.0 percent), furniture (+0.7 percent), and building materials (+0.5 percent). Losing pace in March were sales at health/personal care stores (-0.3 percent) and nonstore retailers (-6.4 percent). Retail sales over the first three months of 2022 were 12.9 percent ahead of their year-ago pace.
Energy and food led to another month of inflation. The Consumer Price Index (CPI) rose a seasonally adjusted 1.2 percent in March, the largest single-month gain for the Bureau of Labor Statistics measure since May 1982. CPI has surged 8.5 percent over the past year, its largest 12-month comparable since December 1981. Energy prices swelled 11.0 percent, as gasoline prices shot up 18.3 percent (and up 48.0 percent over the past year). Food prices advanced 1.0 percent and have risen 10.0 percent over the last 12 months. Net of energy and food, core CPI increased 0.3 percent (its smallest gain since last September) and was up 6.5 percent over the past year (a 40-year high). Core prices have jumped 6.5 percent over the past year. Used cars/truck prices plummeted 3.8 percent (but remained 35.3 percent ahead of year-ago levels). Increasing were prices for transportation services (+2.0 percent), medical services (+0.6 percent), apparel (+0.6 percent), shelter (+0.5 percent), new vehicles (+0.2 percent), and medical care commodities (+0.2 percent).
Wholesale prices also swelled in March. The Producer Price Index for final demand surged a seasonally adjusted 1.4 percent during the month and was up 11.4 percent over the past year (the largest year-to-year increase for the Bureau of Labor Statistics measure in its 12-year history). The core measure (which nets out food, energy, and trade services) jumped 0.9 percent, its biggest advance in 14 months. Over the past year, the core measure has risen 7.0 percent. PPI for energy and food advanced 5.7 percent and 2.4 percent, respectively. Wholesale prices for other goods gained 1.1 percent while those for services bloomed 0.9 percent. Rising were prices for fuel and iron/steel scrap, while prices fell for meat/veal and natural gas.
Manufacturing output rose again in March. The Federal Reserve estimates manufacturing production gained a seasonally adjusted 0.9 percent during the month, following a 1.5 percent advance in February. Durable and nondurable goods production increased 1.3 percent and 0.4 percent, respectively, with the former boosted by a 7.8 percent bump for automobiles. Manufacturing production was 4.9 percent ahead of year-ago levels. Overall industrial production increased 0.9 percent during the month, matching February’s gain, below January’s 1.0 percent advance, and 5.5 percent above March 2020 levels. Mining output rose 1.7 percent and utilities output gained 0.4 percent.
Consumer sentiment improved in early April. The University of Michigan’s Index of Consumer Sentiment added 6.3 points during the month to a seasonally adjusted 65.7 (1966Q1=100). Should this hold when updated later this month, it would be the index’s best reading since January, although still near its pandemic lows. Almost all the gain resulted from a brighter outlook for the future as the expectations index added 9.8 points to 64.1. The current conditions measure added 9/10ths of a point to 68.1. Some of the improvement appears tied to consumers’ expectations that gasoline prices will essentially hold steady over the next year, an improvement from the 49.6 cent increase expected in March’s survey data.
Other U.S. economic data released over the past week:
- Jobless Claims (Week ending April 9, 2022, First-Time Claims, seasonally adjusted): 185,000, +18,000 vs. the previous week, -479,000 vs. the same week a year earlier). 4-week moving average: 172,250 (-72.5% vs. the same week a year earlier).
- Import Prices (March 2022, All Imports, not seasonally adjusted): +2.6% vs. February 2022; +12.5% vs. March 2021. Nonfuel Imports: +1.2% vs. February 2022; +7.5% vs. March 2021.
- Export Prices (March 2022, All Exports, not seasonally adjusted): +4.5% vs. February 2022; +18.8% vs. March 2021. Nonagricultural Exports: +4.5% vs. February 2022; +18.5% vs. March 2021.
- State Employment (March 2022, Nonfarm Payrolls, seasonally adjusted): Vs. February 2022: Up in 10 states and essentially unchanged in 40 states and the District of Columbia. Vs. March 2021: Increased in 49 states and the District of Columbia and essentially unchanged in 1 state.
- Treasury Budget (March 2022, Federal Budget Deficit Over 1st Six Months of FY22): $668.3 billion (-60.8% vs. 1st Six Months of FY21).
- Business Inventories (February 2022, Manufacturers’ and Trade Inventories, seasonally adjusted): $2.237 trillion (+1.3% vs. January 2022, +12.4% vs. February 2021).
The opinions expressed here are not necessarily those of Kevin’s current employer. No endorsements are implied.