U.S. Data Round-Up

August 15, 2012

A large number of economic indicators were released Tuesday and today.  Such showed better activity with contained inflation.  Here are some of the highlights.

  • After a series of several weak monthly reports, retail sales advanced 0.8% in July, but that gain just barely offset June’s 0.7% decline and left sales in May-July 0.6% softer than in February-April.  According to U.S. national income accounts figures, consumer spending slowed to a worrisome 1.5% annualized pace in the second quarter from 2.4% in the first quarter.  Consumption growth had not been weaker in a year.  Weekly chain store sales show a fairly flat pattern at the start of August.
  • According to monthly figures compiled by the National Federation of Small Businesses, corporate confidence ticked down another 0.2 points to 91.2 in July.  Small business confidence had readings of 94.4 in May and a high for 2912 of 94.5 in April.  The Romney/Ryan team is offering voters an budget and red tape-cutting platform promised to make life much easier for America’s small businesses.  The so-called NIFB index in August and the autumn will provide useful feedback whether small businessmen agree.
  • The monthly poll of economic optimism of the Investor’s Business Daily also pointed to deepening pessimism with a 45.6 reading in August, down from 47.0 in July and 49.4 six months earlier in February.
  • Like retail sales, industrial production broke out of a mini-slump, climbing 0.6% in July after back-to-back increases of just 0.1%.  Factory output revived 0.5% in July, lifting factory capacity usage by 0.2 percentage points to 77.8.  However, the Empire State manufacturing index for August produced a very disappointing result of minus 5.85.  That was the first sub-zero reading of 2012 and the weakest month since October 2011.  The index had printed at +7.39 in July and as high as 17.09 as recently as May.
  • Consumer prices haven’t risen on month since March.  Such were unchanged in July and just 1.4% above the year earlier level, the smallest 12-month increase since November 2010.  So far this year, consumer prices have advanced 1.3% at an annualized rate.  It helps that a 5.0% 12-month drop in energy prices was the most since the year to October 2009.  But consumer food prices only rose 2.3% on year in spite of worries about the future impact of the Midwest drought, and core inflation of 2.1% was the lowest in nine months.
  • Core producer price inflation of 2.5% in June paints a somewhat stickier price picture and belies the view of those who worry that deflation lurks around the corner.
  • There was a further clue that the housing market at long last may be stabilizing.  The National Association of Home Builders/Wells Fargo housing measure printed in August at +37, up from 35 in July, 29 in May and June and 15 in August 2011.  Although below the 50 threshold of truly good conditions, the reading this month was the best in 5-1/2 years.  A separate indicator, however, showed softer mortgage applications last week in spite of historically lower borrowing costs.
  • The Treasury Department released its monthly report on international capital flows for June and 1H12.  All three aggregates of net capital movements deteriorated sharply between May and June.  The narrowest definition of long-term capital produced the smallest net inflow ($9.3 billion) in eleven months, but the average monthly inflow in January-June of $42.3 billion was 37% larger than in full-2011.  In contrast, the six-month mean for the widest definition, which includes short-term capital, was an inflow of $32.4 billion, down from $40.0 billion per month in full-2011.

Copyright 2012, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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