{"id":1488,"date":"2019-04-01T12:43:11","date_gmt":"2019-04-01T16:43:11","guid":{"rendered":"https:\/\/naroffeconomics.com\/?p=1488"},"modified":"2019-04-01T12:43:11","modified_gmt":"2019-04-01T16:43:11","slug":"february-retail-sales-and-march-manufacturing-activity","status":"publish","type":"post","link":"https:\/\/naroffeconomics.com\/?p=1488","title":{"rendered":"February Retail Sales and March Manufacturing Activity"},"content":{"rendered":"\n

KEY DATA:<\/strong> Sales: -0.2%; Vehicles:\n+0.7%\/ ISM (Manufacturing): +1.1 points; Orders: +1.9 points<\/p>\n\n\n\n

IN A\nNUTSHELL:<\/strong>  \u201cThe consumer is not out there buying a whole\nlot and that does not bode well for growth.\u201d<\/em><\/strong><\/p>\n\n\n\n

WHAT IT\nMEANS:<\/strong>  The first quarter is in the books, at least\nas far as the calendar is concerned, and it doesn\u2019t look as if the economy did\nso great.<\/em><\/strong>  Most importantly, the\ndata on household spending<\/em><\/strong>, as has been noted before, remains\ntepid.  Retail sales fell in February\ndespite a rebound in vehicle purchases. <\/em><\/strong> The rise in vehicle demand was a surprise\ngiven the weak dealer sales reports.  Actually,\nthis entire report has caveats attached. \nThere was an increase in gasoline sales, but that was likely the result\nof rising prices.  Offsetting that was a\nsharp reduction in building supply purchases, but that came after a similar surge\nin January.  Even given the yes, buts,\nthis was not a good report.  The\n\u201ccontrol\u201d retail sales number, which excludes vehicles, gasoline and building\nsupplies, also fell.  This more closely\ntracks the GDP consumption number and so far this quarter it is pointing to a\nsoft first quarter consumer expenditure growth rate. <\/em><\/strong> It is likely to come in well below 2%.<\/p>\n\n\n\n

As additional data come in, it looks like the manufacturing\nsector is righting itself.  The Institute\nfor Supply Management\u2019s Manufacturing Index rose nicely in March, led by solid\nincreases in new orders, production and employment.<\/em><\/strong>  However, strangely enough, order books\nexpanded at a much slower pace and they grew only modestly.  The overall index is still pointing to solid\ngrowth, but its average for the first quarter is well off the fourth quarter\u2019s\nlevel and that tells me growth is slowing. \n<\/em><\/strong><\/p>\n\n\n\n

There were two other reports released today.  Construction jumped in February, led but a\nhuge rise in government spending on highways, streets, sewers and water\nprojects.  That is weird, as I haven\u2019t\nseen any major new infrastructure spending bills passed either at the federal\nor state and local government levels.<\/em><\/strong> \nMaybe governments are calling clearing snow into huge mounds\n\u201cconstruction\u201d.  I don\u2019t know.  Also, inventories surged in January.  That is worrisome, as I doubt it is occurring\nbecause firms are laying in new supplies for an expected rise in demand.<\/em><\/strong>  Instead, those new stocks may be unintended\nand that means orders will slow so the excess supply can be worked off. MARKETS AND FED\nPOLICY IMPLICATIONS:<\/strong>The economic\ndownslide may be over but there are no clear indications that an acceleration\nin growth is at hand.<\/em><\/strong>  Friday we\nget the March employment report and while there is likely to have been a\nrebound in job gains, that is not saying much given that the February increase\nwas barely measureable.   The second quarter is likely to really tell\nthe story of this year\u2019s economy. \nWeather is starting to warm somewhere and confidence is improving.  If we don\u2019t get a solid rebound in growth in\nthe spring, especially after what is likely to have been a very disappointing\nfirst quarter, then it is hard to see how we will do anything but slowly\ndecelerate going forward.<\/em><\/strong>  There\nis nothing out there to push growth forward and the comparisons with the tax\ncut-hyped 2018 economy is going to make things more difficult.  The Fed has reason to watch and wait and\nthat is what it will do, since that is what it said it would do.  And if there is one thing we know about the\nFed, it always does what it says it will do, at least until it says it will do\nsomething different.  And then it does\nthat \u2026 sometimes.<\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

KEY DATA: Sales: -0.2%; Vehicles: +0.7%\/ ISM (Manufacturing): +1.1 points; Orders: +1.9 points IN A NUTSHELL:  \u201cThe consumer is not out there buying a whole lot and that does not bode well for growth.\u201d WHAT IT MEANS:  The first quarter is in the books, at least as far as the calendar is concerned, and it … Continue reading February Retail Sales and March Manufacturing Activity<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-1488","post","type-post","status-publish","format-standard","hentry","category-economic-indicators"],"_links":{"self":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1488","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1488"}],"version-history":[{"count":1,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1488\/revisions"}],"predecessor-version":[{"id":1489,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1488\/revisions\/1489"}],"wp:attachment":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1488"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1488"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1488"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}