Consumers continued to spend in January while manufacturing remained soft. Here are the five things we learned from U.S. economic data released during the week ending February 14.
Retail sales picked up the pace in January. The Census Bureau estimates retail and food services sales grew 0.3 percent during the month to a seasonally adjusted $529.8 billion. Sales at auto dealers & parts store rose 0.2 percent but fell 0.5 percent at gas stations (as prices at the pump mellowed). Net of activity at auto dealers/parts stores and gas stations, core retail sales advanced 0.4 percent, just off December’s 0.5 percent bounce. Sales grew at retailers focused on building materials (+2.1 percent), furniture (+0.6 percent), groceries (+0.3 percent), and sporting goods/hobbies (+0.1 percent). Also, restaurants and bars reported a 1.2 percent sales jump. Losing momentum in January were clothing stores (-3.1 percent), electronics/appliance retailers (-0.5 percent), and health/personal care stores (-0.4 percent). Over the past year, retail sales have risen 4.4 percent, while the 12-month comparable for core retailers was +3.3 percent.
A slowdown in aircraft production slowed January manufacturing activity. The Federal Reserve reports that manufacturing production fell for the first time in three months with a seasonally adjusted 0.1 percent decline. Durable goods output sank 0.5 percent, hurt by a 7.4 percent drop in aerospace transportation equipment (think the shutdown of 737 MAX production). Nondurables output weakened 0.6 percent. Overall industrial production shed 0.3 percent, its fourth decline in five months. While mining output gained 1.2 percent, moderate winter weather slackened utilities’ output by 4.0 percent. Both manufacturing and overall industrial production were both 0.8 percent below their year-ago paces.
A drop in prices at the pump kept inflation at bay in January. The Bureau of Labor Statistics finds the Consumer Price Index (CPI) increased 0.1 percent on a seasonally adjusted basis, following three consecutive 0.2 percent monthly increases. Food prices grew 0.2 percent while energy CPI declined 0.7 percent (gasoline: -1.6 percent). Net of food and energy, core CPI rose 0.2 percent. Increasing were prices for apparel (+0.7 percent), shelter (+0.4 percent), transportation services (+0.3 percent), and medical services (+0.3 percent). Prices declined for used cars/trucks (-1.2 percent) and medical care commodities (-0.6 percent). Over the past year, CPI has risen 2.5 percent while core CPI has a 12-month comparable of +2.3 percent.
The count of job openings narrowed as 2019 ended. Nonfarm employers had a seasonally adjusted 6.423 million unfilled jobs on the final day of 2019, down 364,000 from November and 14.1 percent from a year earlier. The Bureau of Labor Statistics also tells us that were 5.739 million open private-sector jobs, down 16.3 percent from December 2018 levels. Substantial year-to-year percentage declines in job openings were widespread across the economy. This included drops in retail (-29.2 percent), financial activities (-20.3 percent), construction (-20.1 percent), and manufacturing (-17.2 percent). Edging up was the count of hired workers, including by 80,000 to 5.907 million (+3.0 percent versus December 2018), with private sector hiring growing 3.9 percent from a year earlier to 5.563 million. Separations inched up by 21,000 to 5.730 million (+4.8 percent versus December 2018), with 3.488 million people quitting their jobs (up 2.9 percent from a year earlier) and 1.895 million people laid off (up 8.2 percent from a year earlier).
Small business owner sentiment solidified in January. The Small Business Optimism Index from the National Federation of Independent Business added 1.6 points during the month to a seasonally adjusted reading of 104.3. The measure has been above a reading of 100 (benchmarked to 1986 sentiment) for 38 straight months. Making positive contributions were six of 10 index components, led by expected real sales, earnings trends, current job openings, and whether it is a good time to expand. The press release said that “2020 is off to an explosive start for the small business economy.”
Other U.S. economic data released over the past week:
– Jobless Claims (week ending February 8, 2020, First-Time Claims, seasonally adjusted): 205,000 (+2,000 vs. previous week; -26,000 vs. the same week a year earlier). 4-week moving average: 212,000, -7,4% vs. the same week a year earlier).
– University of Michigan Surveys of Consumers (February 2020-preliminary, Index of Consumer Sentiment (1966Q1=100), seasonally adjusted): 100.9 (January 2020: 99.8, February 2019: 93.8).
– Import Prices (January 2020, All Imports): Unchanged vs. December 2019, +0.3% vs. January 2019. Nonfuel Imports: +0.2% vs. December 2019, -0.9% vs. January 2019.
– Export Prices (January 2020, All Exports): +0.7% vs. December 2019, +0.5% vs. January 2019. Nonagricultural Exports: +0.7% vs. December 2019, +0.2% vs. January 2019.
– Business Inventories (December 2019, Manufacturers’ and Trade Inventories, seasonally adjusted): $2.040 trillion (+0.1% vs. November 2019, +2.2% vs. December 2018.
– Monthly Treasury Statement (January 2020 (First 4 Months of FY2020, Federal Budget Deficit): -$389.2 billion (vs. First 4 months of FY2019: -$310.3 billion).
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