{"id":1688,"date":"2020-03-17T10:54:01","date_gmt":"2020-03-17T14:54:01","guid":{"rendered":"https:\/\/naroffeconomics.com\/?p=1688"},"modified":"2020-03-17T10:54:01","modified_gmt":"2020-03-17T14:54:01","slug":"february-retail-sales-and-industrial-production-march-builders-index-january-job-openings","status":"publish","type":"post","link":"https:\/\/naroffeconomics.com\/?p=1688","title":{"rendered":"February Retail Sales and Industrial Production, March Builders\u2019 Index, January Job Openings"},"content":{"rendered":"\n

KEY DATA:<\/strong>  Retail Sales: -0.5; Ex-Vehicles: -0.4%\/ IP:\n+0.6%; Manufacturing: +0.1%\/ NAHB: -2 points\/ Openings: +411,000<\/p>\n\n\n\n

IN A\nNUTSHELL:<\/strong>  \u201cThe economy was not doing particularly well\nbefore the virus hit, which is not good news.\u201d<\/em><\/strong><\/p>\n\n\n\n

WHAT IT\nMEANS:<\/strong>  February data are still not reflective of\nwhere we are going, but it would be nice if they were strong enough to have\nformed some type of base.  That was\nhardly the case.  Take retail spending,\nwhich we know will be largely limited to online sales going forward.  Consumer demand faded in February,<\/em><\/strong>\nthough that came on top of a strong January gain.  Together, though, the two months didn\u2019t show\nmuch of an increase.  We\ncan discount the sharp decline in gasoline because prices fell sharply, but\npeople didn\u2019t eat out, buy electronics, appliances, clothing or just about anything\nelse.  All they did was shop online<\/em><\/strong>\n\u2013 which as I said, is what they will likely be still doing to some extent.  It will be interesting to see what the March\nretail numbers look like.  On the one\nhand, the last two weeks will be disastrous for anything but online sales.  But the panic buying may have made up for at\nleast some of that. <\/em><\/strong> So,\nthe decline should be large, but maybe not as enormous as some fear.<\/em><\/strong>  April is when we could see the worst drop as\nit looks like social distancing will last at least the entire month.  <\/p>\n\n\n\n

As far as manufacturing was concerned, output edged\nup in February.  Yes, overall industrial\nproduction soared, but it was all weather related.<\/em><\/strong>  Utility output was up over 7% after having\ndeclined by about 5% or more the previous two months.  What saved manufacturing was a surge in\nvehicle assemblies.  I suspect that not a\nlot of people are out kicking the tires these days, so that could reverse with\na vengeance in the months to come.  Look\nfor a truly ugly March manufacturing production number.<\/em><\/strong><\/p>\n\n\n\n

On the housing front, the National Association of\nHome Builders reported that its index edged down only relatively modestly in\nMarch.<\/em><\/strong>  All of the components, including traffic\ndeclined a small amount.  That\nwas a pleasant surprise.<\/em><\/strong>  <\/p>\n\n\n\n

The most meaningless, outdated number of the day was\njob openings, which were up sharply in January. \nThat is likely to change dramatically once we get the March numbers, in\ntwo months.  <\/em><\/strong>MARKETS AND FED\nPOLICY IMPLICATIONS:<\/strong>Is a\nrecession baked in the cake?  It is hard\nto see that it isn\u2019t. <\/em><\/strong> Whether\nthe decline lasts four, six or eight months and is officially declared a\nrecession is unclear, but we haven\u2019t seen the really bad data\nyet.  The first time we get an employment\nreport down massively, and we are going to get at least one or two, that will\ntest the will of households. <\/em><\/strong> How\nbusinesses continue to produce and stock the supply chain will be a\nchallenge.  Europe is going into recession\nand China is just starting to recover<\/em><\/strong>, so at least one or two quarters\nof negative world economic growth is likely. \nSecond quarter growth could be sharply negative.  We will not shake the downturn until people\ncan get back out to live their lives more normally.<\/em><\/strong>  And that requires largely ending the spread\nof the virus.  This country has been\nunprepared to even measure the extent of the problem as testing is way behind\nthe rest of the world.  That is a failure\nof leadership and planning.  As testing\nramps up, the numbers will surge.  But it\nis not clear when we will get things together as we are in a leadership vacuum\nthat is being filled by governors and mayors making independent decisions but\nwithout the resources to meet the challenges they face.  The Senate is not even discussing an economic\nstimulus package, the President has just discovered there really is a problem\nand the administration\u2019s economic brainless trust is either claiming we will\nnot go into a recession or is proposing ideas that make little sense.  I was criticized for attacking the payroll\ntax proposal.  But if you are not\nworking, you don\u2019t pay the payroll tax anyway! Help is needed for those who are\ngoing to or have already lost their jobs, their businesses, their incomes,\ntheir health care and their ability to meet basic needs and pay bills and debt.  It seems our federal leaders in the\nadministration and Congress just don\u2019t get it. <\/em><\/strong>The result is that the downturn will likely\nbe longer and deeper than necessary because of this federal-level leadership\nfailure and it is why I and so many other economists now have a recession in\nour forecasts.  <\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

KEY DATA:  Retail Sales: -0.5; Ex-Vehicles: -0.4%\/ IP: +0.6%; Manufacturing: +0.1%\/ NAHB: -2 points\/ Openings: +411,000 IN A NUTSHELL:  \u201cThe economy was not doing particularly well before the virus hit, which is not good news.\u201d WHAT IT MEANS:  February data are still not reflective of where we are going, but it would be nice if … Continue reading February Retail Sales and Industrial Production, March Builders\u2019 Index, January Job Openings<\/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-1688","post","type-post","status-publish","format-standard","hentry","category-economic-indicators"],"_links":{"self":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1688","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=1688"}],"version-history":[{"count":1,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1688\/revisions"}],"predecessor-version":[{"id":1689,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1688\/revisions\/1689"}],"wp:attachment":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1688"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1688"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1688"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}