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U.S. economic data was generally positive this week.

Comerica Economic Weekly, June 14, 2019

June 14, 2019
By Robert A. Dye, Ph.D., Daniel Sanabria

U.S. economic data was generally positive this week. Headline inflation for May was weighed down by falling petroleum prices. 

Retail sales increased by 0.5 percent in May, boosted by higher unit auto sales. Unit auto sales increased noticeably in May, from a 16.4 million unit rate in April, up to a 17.4 million unit rate. The dollar value of retail sales of autos and parts increased by 0.7 percent for the month. Retail sales ex-autos gained 0.5 percent in May. Electronics and appliance store sales gained 1.1 percent for the month, as did sporting goods stores. Over the 12 months ending in May, total retail sales were up a moderate 3.2 percent. The Consumer Price Index was up 1.8 percent over this period, implying a roughly 1.4 percent increase in retail sales for the year, after inflation. 

Total industrial production gained 0.4 percent in May, reversing a 0.4 percent loss in April. Manufacturing output increased by 0.2 percent. Total motor vehicle assemblies increased from a 10.65 million unit pace in April, to 11.33 million in May. Mining output inched up by 0.1 percent. Utilities gained 2.1 percent in May, after a 3.1 percent loss in April. Over the year ending in May, total industrial production was up 2.0 percent. Capacity utilization inched up to 78.1 percent, still well below the cyclical peak of 79.6 percent from last November. 

The Consumer Price Index increased by just 0.1 percent for the month, after increasing by 0.3 percent in April. The CPI’s energy price sub-index fell by 0.6 percent in May after three months of strong gains. Food prices gained 0.3 percent in May, pushed up by non-alcoholic beverages and other categories. Core CPI (less food and energy) increased by just 0.1 percent for the fourth consecutive month. Over the previous 12 months, headline CPI was up by 1.8 percent, well below the 2.9 percent year-over-year gains from last summer. Core CPI was up by 2.0 percent for the 12 months ending in May, down from the 2.3 percent year-over-year gain from June 2018.

The headline Producer Price Index for Final Demand gained just 0.1 percent in May. The energy sub-index for PPI fell by 1.0 percent for the month. Wholesale food prices ticked down 0.3 percent. The trade sub-index fell by 0.5 percent in May after posting a similar loss in April. Core PPI (excluding food, energy and trade) increased 0.4 percent in May for the second consecutive month. Over the previous 12 months, headline PPI was up by 1.8 percent, down significantly from the 3.4 percent year-over-year increase from last July. Core PPI was up by 2.3 percent for the 12 months ending in May, down from 3.1 percent year-over-year growth last September.

Total mortgage applications increased by 26.8 percent for the week ending June 7. Refis surged, up 46.5 percent for the week, after gaining 6.4 percent the week before. Purchase apps were also up in early June, increasing by 10.0 percent. On a four-week moving average basis, refi apps were up 47.5 percent over the previous 12 months. Purchase apps were up 6.3 percent over the year. According to the Mortgage Bankers Association, the rate for a 30-year fixed rate mortgage fell to 4.12 percent.

Initial claims for unemployment insurance increased by 3,000 for the week ending June 8, to hit 222,000. Continuing claims gained 2,000, to hit 1,695,000 for the week ending June 1. Claims data into early June still looks good, contrary to the May payroll data which was weaker than expected.

According to the National Federation of Independent Business, small business optimism bounced back in May. Their marquis index increased to 105.0 in May, after sinking to 101.2 in January.

For a PDF version of this report, please click here:  Comerica Economic Weekly, June 14, 2019

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