October was a good month for retailers, less so for manufacturing or the real estate market. Here are the five things we learned from U.S. economic data released during the week ending November 18.
Retail sales rose in October. Retail and food services sales jumped 1.3 percent to a seasonally adjusted $694.5 billion, up 8.3 percent from a year earlier. Higher prices at the pump pushed up gas station sales 4.1 percent, while auto dealers/parts stores enjoyed a 1.3 percent bounce. (Note the Census Bureau does not adjust the data for inflation.) Net of both, core retail sales advanced 0.9 percent in October and were up 8.2 percent from a year earlier. Sales gained at retailers focused on groceries (+1.4 percent), furniture (+1.1 percent), building materials (+1.1 percent), and health/personal care (+0.5 percent). Restaurants/bars sales surged 1.6 percent. Sales declined at department stores (-2.1 percent), electronics/appliance retailers (-0.3 percent), and sporting goods/hobby stores.
October was the third straight month with modest manufacturing output. The Federal Reserve estimates manufacturing output increased a seasonally adjusted 0.1 percent, following gains in August and September of 0.2 percent and 0.1 percent, respectively. Durable goods manufacturing rose 0.5 percent, while the same for nondurables dropped 0.3 percent. Overall industrial production slipped 0.1 percent in October, with mining and utility output slowing 0.4 percent and 1.5 percent, respectively. Manufacturing was 2.4 percent ahead of its year-ago pace, while overall industrial output was 3.3 percent above October 2021 levels.
Home sales declined for a ninth straight month. The National Association of Realtors reports that existing home sales fell 5.9 percent to a seasonally adjusted annualized rate (SAAR) of 4.43 million units. Sales were a whopping 28.4 percent below year-ago levels. Sales dropped in all four Census regions on both a month-to-month and year-to-year ago basis. Inventories shrank 0.8 percent to 1.22 million units, the equivalent to a relatively tight 3.3 month supply. The median sales price of $379,100 was up 6.6 percent from a year earlier. The press release warned that higher mortgage rates had “squeezed out” some homebuyers from the market.
Wholesale inflation moderates in October. The Bureau of Labor Statistics’ Producer Price Index (PPI) for final demand increased a seasonally adjusted 0.2 percent, matching its September gain. The core wholesale price measure—removing food, energy, and trade services—also grew 0.2 percent (its fifth month at or below 0.3 percent). Energy prices rose 2.7 percent (gasoline: +5.7 percent), while food PPI gained 0.5 percent. Core goods PPI (net of energy and food) declined 0.1 percent. Also falling were services PPI, slipping 0.1 percent. While moderating recently, PPI remained up 8.0 percent over the past year, with the 12-month comparable for core PPI remaining inflated at +5.4 percent.
Forward-looking economic measures declined again in October. The Conference Board’s Leading Economic Index (LEI) fell 0.8 percent to a reading of 114.9 (2016 = 100). The measure has declined a sharp 3.2 percent over the past six months. A mere three of ten LEI components made positive contributions to the index: the interest rate spread, civilian nonaircraft capital goods orders, and new orders for consumer goods. The coincident index inched up 0.2 percent to 109.3 (2016=100). The measure has increased 1.1 percent over the past six months. Three of four coincident index components made positive contributions. The lagging index eked out a 0.1 percent gain to 116.3 (+3.7 percent over the past six months). The press release said LEI’s eighth monthly decline suggests “the economy is possibly in a recession.”
Other U.S. economic data released over the past week:
- Jobless Claims (Week ending November 12, 2022, First-Time Claims, seasonally adjusted): 222,000, -4,000 vs. the previous week, -43,000 vs. the same week a year earlier). 4-week moving average: 221,000 (-20.9% vs. the same week a year earlier).
- Import Prices (October 2022, All Imports, not seasonally adjusted): -0.2% vs. September 2022; +4.2% vs. October 2021. Nonfuel Imports: -0.1% vs. September 2022; +2.9% vs. October 2021.
- Export Prices (October 2022, All Exports, not seasonally adjusted): -0.3% vs. September 2022; +6.9% vs. October 2021. Nonagricultural Exports: -0.3% vs. September 2022; +6.4% vs. October 2021.
- Housing Starts (October 2022, New Privately-Owned Housing Units Starts, seasonally adjusted annualized rate): 1.425 million (-4.2% vs. September 2022; -8.8% vs. October 2021).
- Business Inventories (September 2022, Manufacturers’ and Trade Inventories, seasonally adjusted): $2.464 trillion (+0.4% vs. August 2022; +17.8% vs. September 2021).
- Treasury International Capital Flows (September 2022, Net Foreign Purchases of U.S. Securities, not seasonally adjusted): +$93.8 billion (vs. August 2022: +$175.8 billion; vs. September 2021: +$14.2 billion).
- State Employment (October 2022, Nonfarm Payrolls, seasonally adjusted): Grew in 7 states and steady in 43 states and the District of Columbia vs. September 2022. Grew in 46 states and steady in 4 states and the District of Columbia vs. October 2021.
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