{"id":1659,"date":"2020-02-14T12:45:19","date_gmt":"2020-02-14T17:45:19","guid":{"rendered":"https:\/\/naroffeconomics.com\/?p=1659"},"modified":"2020-02-14T12:45:19","modified_gmt":"2020-02-14T17:45:19","slug":"january-retail-sales-industrial-production-and-import-and-export-prices","status":"publish","type":"post","link":"https:\/\/naroffeconomics.com\/?p=1659","title":{"rendered":"January Retail Sales, Industrial Production and Import and Export Prices"},"content":{"rendered":"\n

KEY DATA:<\/strong>  Sales: +0.3%; Ex-Vehicles and Gasoline: +0.4%\/\nIP: -0.3%; Manufacturing: -0.1%\/ Import Prices: 0%; NonFuel: +0.2%; Exports:\n+0.7%; Farm: +2%<\/p>\n\n\n\n

IN A\nNUTSHELL:<\/strong>  \u201cThe start to the year was pretty mediocre for\nconsumers and manufacturing.\u201d<\/em><\/strong><\/p>\n\n\n\n

WHAT IT\nMEANS:<\/strong>  With the coronavirus and Boeing leading the\nway, the first quarter of this year is expected to be pretty slow and the first\nset of data seem to point to that being the case.<\/em><\/strong>  Take consumer spending, please.  Retail sales were mediocre in January <\/em><\/strong>and\nthey reached that disappointing level only because people were able to get out\nand do some work around the home and visit their favorite restaurant.  Building materials and food services were up\nstrongly.<\/em><\/strong>  There was a pick up in\nfurniture demand but electronics and appliance stores did not do well.  Gasoline sales fell, but so did prices a\nlittle, so don\u2019t look into that too much. \nClothing purchases, which had soared in December, came crashing back to\nearth in January.  There was really nothing pretty\nin this report.<\/em><\/strong>  The one thing\nthat is keeping consumer demand strong is consumer confidence and the\nUniversity of Michigan\u2019s mid-month February estimate posted a gain.  <\/p>\n\n\n\n

Industrial output fell sharply in January as both weather\nand Boeing did a number on production.<\/em><\/strong>  The\nwarm weather<\/em><\/strong> (you notice I didn\u2019t say global warming because we know\nthat doesn\u2019t exist) led to a sharp drop in utility production.<\/em><\/strong>  Boeing\u2019s 737 Max assembly line halt created\nan equally massive decline in aerospace output.<\/em><\/strong>  The saving graces for this report were\nstrong increases in vehicle, petroleum, plastics and computer production.<\/em><\/strong>  That kept the manufacturing decline from\nbeing really ugly.  <\/p>\n\n\n\n

On the inflation front, there isn\u2019t much.  Import prices were flat in January, though\nthere was a moderate uptick in nonfuel costs. <\/em><\/strong> Food import prices were up as were imported\nvehicle costs.<\/em><\/strong>  On\nthe export side, agricultural prices jumped.<\/em><\/strong>  Chinese demand for pork is surging due to the\nswine flu and that is helping farmers. \nIt is unclear what the coronavirus will do to agricultural sales to\nChina over the course of the year, but it is not helpful right now and that may\nwind up depressing U.S. food costs this spring. \n     MARKETS AND FED POLICY IMPLICATIONS:<\/strong>Estimates for the first quarter are running\nwell below 2% and today\u2019s data do nothing to change expectations.  The coronavirus impacts are just starting to\nshow up and the longer this problem goes, the greater the impact.<\/em><\/strong>  Don\u2019t forget that China is critical to large\nsegments of the world economy including many non-industrialized and\nindustrializing nations as well as the EU. \nThere are many countries that will be hurt significantly if this doesn\u2019t\nend soon and there is little reason to expect it to do so.  The same can be said of the Boeing shut\ndown.  <\/em><\/strong>The company wants to start\nback up before getting final approval but no one knows when that will be.  The first quarter for Boeing and their\nsuppliers is lost and it is likely the same will happen in the second\nquarter.  Right now, most economists have\nnot included a significant impact of the coronavirus in the second quarter (I\nam one of them), so there are hopes conditions will be a little better in the\nspring.  The best I can say about that is\nmaybe.  With that in mind, it is\nhard to rationalize the exuberance in the equity markets, at least if you\nbelieve the economy actually matters. \nThe latest Blue Chip consensus has growth at or below 2% for every\nquarter in both 2020 and 2021.  That is\nnot a forecast that says happy days are here again and that investors should go\nall in.  But they seem to be doing that <\/em><\/strong>so\nit should be interesting to see what happens if growth does disappoint.  Or, maybe investors actually like 2%\ngrowth.  Economists do, but that level of\ngrowth is hardly a prescription for strong earnings growth.\n\n\n\n<\/p>\n","protected":false},"excerpt":{"rendered":"

KEY DATA:  Sales: +0.3%; Ex-Vehicles and Gasoline: +0.4%\/ IP: -0.3%; Manufacturing: -0.1%\/ Import Prices: 0%; NonFuel: +0.2%; Exports: +0.7%; Farm: +2% IN A NUTSHELL:  \u201cThe start to the year was pretty mediocre for consumers and manufacturing.\u201d WHAT IT MEANS:  With the coronavirus and Boeing leading the way, the first quarter of this year is expected … Continue reading January Retail Sales, Industrial Production and Import and Export Prices<\/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":[1],"tags":[],"class_list":["post-1659","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1659","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=1659"}],"version-history":[{"count":1,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1659\/revisions"}],"predecessor-version":[{"id":1660,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1659\/revisions\/1660"}],"wp:attachment":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1659"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1659"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1659"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}