Not Rising as Much: May 9 – 13

Even if growing at a slower rate, inflation continued to affect consumers’ and businesses’ moods. Here are the five things we learned from U.S. economic data released during the week ending May 13. 


Consumer prices rose at a slower pace in April. The Bureau of Labor Statistics tells us the Consumer Price Index (CPI) increased a seasonally adjusted 0.3 percent during the month, far smaller than the 1.2 percent jump in March. Energy CPI fell 5.4 percent, with gasoline prices off 6.4 percent on a seasonally adjusted basis (this data does not the reflect the more recent jump in prices at the pump). Food prices, however, rose 0.9 percent. Net of both energy and food, core CPI surged 0.6 percent, its largest gain since January. Rising were prices for transportation services (+3.1 percent), new vehicles (+1.1 percent), shelter (+0.5 percent), and medical care services (+0.5 percent). Prices fell for apparel (-0.8 percent) and used cars/trucks (-0.4 percent). Over the past year, CPI has risen 8.3 percent (just off from its 40-year high), with the core measure swelling 9.4 percent. 

The same held true for wholesale prices. The Producer Price Index (PPI) for final demand increased 0.5 percent in April on a seasonally adjusted basis. This represented a significant improvement for the Bureau of Labor Statistics measure following March’s 1.6 percent rise. The core measure—which removes food, energy, and trade services—advanced 0.6 percent in April after gaining 0.9 percent in March. Wholesale prices for energy and food jumped 1.7 percent and 1.5 percent, respectively. Net of energy and food, core goods prices gained 1.0 percent. Over the past year, PPI has risen 11.0 percent, with the core measure up 6.9 percent over the same 12-month period. 

Americans grew even more pessimistic in early May. The University of Michigan’s Index of Consumer Sentiment lost 6.1 points to a seasonally adjusted 59.1 (1966Q1=100). The index was off a startling 23.8 points from a year earlier and sat at its lowest reading since March 2011. The current conditions measure declined by 5.8 points to 63.6 and the expectations index shed 6.2 points to 56.3. The press release noted that the decline in sentiment was nearly universal regardless of “income, age, education, geography, and political affiliation,” with inflation being a significant contributor. Survey respondents have one-year inflation expectations at +5.4 percent. 

Small business owner sentiment remained fragile in April. The Small Business Optimism Index held steady at a seasonally adjusted 93.2 (1986=100). The National Federation of Independent Business measure was off 6.6 points from a year earlier. Of ten index components, only two—expected real sales and plans to make capital outlays—improved in April. Deteriorating were measures for current inventories, whether it is a good time to expand, expectations for the economy, plans to increase inventories, and expected credit conditions. The press release noted that half of the survey respondents reported difficulty filling open positions. Further, the net percentage of small business owners expecting business conditions to improve slumped to a record low for the 48-year old survey series. 

Wholesale inventories built in March. The Census Bureau reports that wholesale inventories grew 2.3 percent during the month to a seasonally adjusted $840.3 billion, leaving up 22.0 percent from a year earlier. Durable goods inventories swelled 2.2 percent and those for nondurables rose 2.6 percent. Wholesale sales gained 1.7 percent to $686.2 billion (+22.1 percent versus March 2021), with gains for durable and nondurable goods of +1.7 percent and 1.6 percent, respectively. The resulting inventory-to-sales (I/S) ratio of 1.22 matched February’s and was off a basis point from a year earlier. The durable goods I/S ratio also held steady at 1.57 (up six basis points from March 2021) and the nondurables I/S ratio added a basis point to 0.92 (March 2021: 0.96). 

Other U.S. economic data released over the past week:

  • Jobless Claims (Week ending May 7, 2022, First-Time Claims, seasonally adjusted): 203,000, +1,000 vs. the previous week, -291,000 vs. the same week a year earlier). 4-week moving average: 192,750 (-64.2% vs. the same week a year earlier). 
  • Import Prices (April 2022, All Imports, not seasonally adjusted): Unchanged vs. March 2022; +12.0% vs. April 2021. Nonfuel Imports: +0.4% vs. March 2022; +7.2% vs. April 2021. 
  • Export Prices (April 2022, All Exports, not seasonally adjusted): +0.6% vs. March 2022; +18.0% vs. April 2021. Nonagricultural Exports: +0.5% vs. March 2022; +17.6% vs. April 2021. 
  • Monthly Treasury Statement (April 2022, FY2022 Budget Deficit To Date): -$360.0 billion (vs. 1st 7 Months of FY2021: -$1.932 Trillion).
  • Senior Loan Officers Option Survey

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

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