As the weather warmed in early May, consumers’ confidence cooled. Here are the five things we learned from U.S. economic data released during the week ending May 10.
Consumer sentiment took a hit in early May. The University of Michigan’s Index of Consumer Sentiment fell 9.8 points to a seasonally adjusted 67.4. Despite being the index’s lowest reading in six months, the measure remained up 14.2 percent from a year earlier. The current conditions index lost 10.2 points to 68.8 (+5.7 percent versus May 2023), while the expectations index dropped 9.5 points to 66.5 (+20.7 percent versus May 2023). The press release noted that deterioration in confidence spread “across consumers, with decreases across age, income, and education groups,” with “worries” about “inflation, unemployment and interest rates.” Consumers expect prices will rise 3.5 percent over the next 12 months.
Consumers kept their credit cards in their wallets in March. American consumers held a seasonally adjusted $5.059 trillion in outstanding non-real estate backed debt. The Federal Reserve figure was up $6.3 billion for the month and 2.3 percent from a year earlier. Revolving credit balances, which include credit cards, were up $0.2 billion to $1.338 trillion. Revolving credit balances have risen 7.8 percent over the past year. Nonrevolving credit balances increased $6.1 billion to $3.721 trillion. Nonrevolving credit balances, which include college and auto loans, have risen a mere 0.5 percent over the past year.
There was a small spike in jobless claims in early May. The Department of Labor reports there were a seasonally adjusted 231,000 first-time claims made for unemployment insurance benefits during the week ending May 4. This represented a 22,000 increase from the prior week and a 6,000 bump from the comparable year-ago week. The four-week moving average of 215,000 was down 1.4 percent from a year earlier. 1.778 million people (not seasonally adjusted) were receiving some form of unemployment insurance benefits during the week ending April 20, up 3.7 percent from a year earlier.
Wholesalers saw inventories shrink in March. Merchant wholesalers’ inventories declined 0.4 percent to a seasonally adjusted $894.7 billion. The Census Bureau measure was 2.3 percent below its year-ago mark. Durable and nondurable goods inventories decreased 0.1 percent and 1.1 percent, respectively. Wholesalers’ sales slumped 1.3 percent during the month to $662.8 billion. Sales were 2.0 percent ahead of their year-ago pace. Durable (-1.0 percent) and nondurable (-1.6 percent) goods sales declined. The inventory-to-sales (I/S) ratio inched up one basis point to 1.35 (March 2023: 1.40). Adding two basis points was the durable goods I/S (1.82), while the nondurables ratio held steady at 0.93.
The U.S. government continues to pace towards a high budget deficit. According to the Bureau of Fiscal Service, the U.S. government had collected $2.964 trillion in receipts during the first seven months of FY2024, up 10.3 percent over the comparable FY2023 months. Individual and corporate tax collections were up 11.4 percent and 27.5 percent, respectively, from the first seven months of FY2023. Outlays totaled $3.819 trillion over those seven months, 5.8 percent ahead of its year-ago pace. Interest on federal government debt represented $624.5 billion of outlays, up 35.7 percent from a year earlier. The overall federal government budget deficit thus far in the fiscal year was -$855.2 billion, down 7.5 percent from the comparable FY2023 months. The Bureau, however, expects the budget to total $1.859 trillion for the entire fiscal year, which would be up 9.7 percent higher from the prior year.
Other U.S. economic data released over the past week:
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What We Learned About the U.S. Economy Last Week 