More Turbulence: May 16 – 20

Retail sales and factory orders grew in April, but other data were not as rosy. Here are the five things we learned from U.S. economic data released during the week ending May 20. 


Forward-looking measures point toward choppy economic growth. The Conference Board’s Leading Economic Index (LEI) slipped 0.3 percent to a reading of 119.2 (2016=100) in April, following two monthly increases. The LEI was up a tepid 0.9 percent over the past six months. Only four of ten LEI components made positive contributions to the headline index, while measures for consumer expectations for the economy, building permits, and jobless claims weighed down the measure. The Coincident Index grew by 0.4 percent to 108.8 (+1.6 percent over the past six months), with all 4 of its components making positive contributions. The lagging index also advanced 0.4 percent (to 111.6, +2.6 percent over the past six months). The Conference Board anticipates the U.S. economy will grow at a moderate 2.3 percent pace this year.

Retail sales rose again in April—but that is before considering inflation. Retail and food services swelled 0.9 percent to a seasonally adjusted $677.7 billion, following a 1.4 percent bump in March. Retail sales were up 8.2 percent from a year earlier. It is important to note that the Census Bureau does not adjust retail sales data for inflation. Motor vehicle and parts dealer sales advanced 2.2 percent, while those at gas stations fell 2.7 percent. Net of both, core retail sales gained 1.0 percent in April and were up 8.2 percent from April 2021. Sales improved at retailers focused on electronics/appliances (+1.0 percent), apparel (+0.8 percent), health/personal care (+0.7 percent), and furniture (+0.7 percent).  Restaurant and bar sales rose 2.0 percent. Falling were sales at sporting goods/hobby retailers (-0.5 percent), grocery stores (-0.1 percent), and building materials retailers (-0.1 percent).  

Factory output grew for a third straight month in April. The Federal Reserve tells us that manufacturing production rose a seasonally adjusted 0.8 percent during the month, following gains of 1.3 percent and 0.8 percent during the two prior months. Manufacturing output has risen 5.8 percent over the past year. Durable and nondurable goods production grew 1.1 percent and 0.3 percent, respectively. Motor vehicle production jumped 3.9 percent in April and was 17.0 percent above year-ago levels. Overall industrial production rose 1.1 percent in April and has grown 6.4 percent over the past 12 months. Mining output increased 1.6 percent, while that at utilities jumped 2.4 percent. Factories were operating at a high level as the manufacturing capacity utilization hit a 15-year high at 79.2 percent. 

Sales of previously owned homes fell for the fourth time in five months. The National Association of Realtors reports that existing home sales dropped 2.4 percent in April to a seasonally adjusted annualized rate (SAAR) of 5.610 million units. Sales were 5.9 percent below year-ago levels. Sales in the Northeast and Midwest rose during the month but slumped in the South and West. The number of homes available for sale jumped 10.8 percent to 1.030 million, representing a still paltry 2.2 month supply. The median sales price of $391,200 represents a 14.8 percent increase over the past year. The press release notes that “[h]igher home prices and sharply higher mortgage rates have reduced buyer activity.”

Housing starts also slipped in April. The Census Bureau estimates privately-owned home starts decreased 0.2 percent during the month to a seasonally adjusted annualized rate (SAAR) of 1.728 million. Even with the decline, starts were up 14.6 percent from a year earlier. Starts of single-family homes fell 7.3 percent to an annualized 1.110 million units, while multi-family unit starts surged 16.8 percent to an annualized 612,000 units. Looking towards the future, issued building permits dropped 3.2 percent to an annualized 1.819 million (+3.1 percent versus April 2021). Meanwhile, completions slumped 5.1 percent to an annualized 1.295 million homes (-8.6 percent vs. April 2021). 

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

  • Jobless Claims (Week ending May 14, 2022, First-Time Claims, seasonally adjusted): 218,000, +21,000 vs. the previous week, -249,000 vs. the same week a year earlier). 4-week moving average: 199,500 (-61.2% vs. the same week a year earlier). 
  • State Employment (April 2022, Nonfarm Payrolls, seasonally adjusted): Grew in 11 states and held steady in 39 states and the District of Columbia vs. March 2022. Grew in 49 states and the District of Columbia and held steady in 1 state.
  • Housing Market Index (May 2022, Index (>50=More Homebuilders Viewing Housing Market as “Good” versus “Poor,” seasonally adjusted): 69 (vs. April 2022: 77; vs. May 2021: 83).
  • Bankruptcy Filings (Year Ending March 31, 2022, Business and Nonbusiness Filings): 395,373 (-16.5% vs. Year Earning March 31, 2021).
  • Treasury International Capital Flows (March 2022, Net Foreign Purchases of U.S. Securities, seasonally adjusted): +$20.2 billion (vs. February 2022: +$91.5 billion; March 2021: +$207.7 billion). 

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

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