Still Filling Shopping Bags: May 15 – 19

Retail sales held their own in April. Here are the five things we learned from U.S. economic data released during the week ending May 19.


Retail sales edged up in April, but the gains were not widespread. Retail and food services sales grew 0.4 percent to a seasonally adjusted $686.1 billion. With the gain, the Census Bureau data series was 1.6 percent above its April 2022 reading. Lower prices at the pump led to a 0.8 percent decline in sales at gas stations, while auto dealers saw a 0.1 percent increase. (Note that there are no adjustments for inflation in this data series.) Net of both, core retail sales gained 0.6 percent in April and were 4.3 percent ahead of their year-ago pace. Sales improved at nonstore retailers (+1.2 percent), stores focused on health/personal care (+0.9 percent) and building materials (+0.5 percent), and restaurants/bars (+0.6 percent). Sales slumped at sporting goods/hobby retailers (-3.3 percent), furniture stores (-0.7 percent), electronics/appliances retailers (-0.5 percent), and grocery stores (-1.1 percent).

Sales of previously owned homes fell again in April…as had sale prices. Existing home sales dropped 3.4 percent to a seasonally adjusted annualized rate (SAAR) of 4.28 million units. The National Association of Realtors data series was down a startling 23.2 percent from a year ago. Sales declined vs. March in all four Census regions, including drops in the West and South of 6.1 percent and 3.4 percent, respectively. All four regions’ sales were off by at least 20 percent from a year earlier. More homes were on the market—inventories grew 7.2 percent to 1.040 million (its highest level since November). Nonetheless, this translated into a mere 2.9 month supply. The bloom was off the rose for home prices as the median sales price of $388,800 was down 1.7 percent from a year earlier (the declines were in the West and South). The press release notes that “job gains, limited inventory and fluctuating mortgage rates” drove current market conditions.

Housing starts edged up in April. The Census Bureau estimates housing starts increased 2.2 percent to a seasonally adjusted annualized rate (SAAR) of 1.401 million, split between gains of 1.6 percent and 5.2 percent for single- and multi-family units, respectively. Starts remained 22.3 percent below year-ago levels. Looking towards the future, issued housing permits dropped 1.5 percent to an annualized 1.416 million (-21.1 percent versus April 2022). Single-family home permits gained 3.1 percent, while those for multi-family units slumped 9.7 percent. Completions plummeted 10.4 percent to an annualized 1.375 million (+1.0 percent versus April 2022).  

Manufacturing activity picked up in April. The Federal Reserve reports that manufacturing production jumped a seasonally adjusted 1.0 percent after dropping 0.8 percent in March. Durable and nondurable production was up 1.4 percent and 0.6 percent, respectively. Automobile production surged 9.3 percent. Overall industrial production grew 0.5 percent, its first increase in three months. While mining output advanced 0.6 percent, warmer weather led to a 3.1 percent decline at utilities. Manufacturing production was off 0.9 percent from year-ago levels, while industrial production was up a tepid 0.2 percent. 

Forward-leading data continued to suggest a recession. The Conference Board’s Leading Economic Index (LEI) dropped 0.6 percent in April to a seasonally adjusted 107.5 (2016=100). The LEI has fallen for 13 straight months and 4.4 percent over the past six months. Only three of 10 LEI components made positive contributions: stock prices, civilian nonaircraft capital goods orders, and new orders for manufactured consumer goods. The coincident index (CEI) grew 0.3 percent in March and 0.7 percent over the past six months to 110.2. All four CEI components contributed positively, led by industrial production and personal income. The lagging index (LAG) slipped 0.1 percent to 118.3. The Conference Board expects a “mild recession” by mid-year.

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

  • Jobless Claims (Week ending May 13, 2023, First-Time Claims, seasonally adjusted): 242,000, -22,000 vs. the previous week, +20,000 vs. the same week a year earlier). 4-week moving average: 244,250 (+14.0% vs. the same week a year earlier). 
  • Housing Market Index (May 2023, Index (>50=More Homebuilders View the Housing Market as “Good” than “Poor,” seasonally adjusted): 50 (vs. April 2023: 45; vs. May 2022: 69).
  • State Employment (April 2023, Nonfarm Payrolls, seasonally adjusted): Increased in 5 States and unchanged in 45 states and the District of Columbia vs. March 2023. Increased in 40 states and unchanged in 10 states and the District of Columbia vs. April 2022. 
  • Business Inventories (March 2023, Manufacturers’ and Trade Inventories, seasonally adjusted): $2.490 trillion (-0.1% vs. February 2023; +6.5% vs. March 2022). 
  • Treasury International Capital (March 2023, Net Foreign Purchases of U.S. Securities, not seasonally adjusted): +$110.5 billion (February 2023: +$64.9 billion; March 2022: +$20.3 billion).

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

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