Here’s a quick look at the most significant economic indicators of the day and what they tell us.
Retail Sales
U.S. retail sales rose for a fourth month, growing 0.9% to $677.7 billion in April, according to the Census Bureau. While that’s the smallest of the four monthly increases so far in 2022, economists said it shows consumers are still able to support the economy, despite painful inflation. Overall, people continued to spend even as higher prices undermined their purchasing power. Many likely spent some of what they saved during the early days of the pandemic quarantine, increasingly venturing out as COVID-19 restrictions fell to the rearview, economists said. Sales—which aren’t adjusted to remove the impact of inflation—rose 2% at restaurants and bars, 1.1% at department stores, and 2% at online stores. On the other hand, grocery sales fell very slightly, by 0.1%, showing people were actually buying less food as prices soared.
Homebuilding Index
Homebuilder confidence fell for the fifth month, this time dropping to its lowest point since the summer of 2020, as single-family homes became increasingly unaffordable, the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index showed. Rapid increases in mortgage rates and the price of building materials are adding to ever-rising home prices, making it increasingly less appealing to buy. “The housing market is facing growing challenges,” NAHB Chief Economist Robert Dietz said in a statement. “Entry-level and first-time homebuyers are especially bearing the brunt of this rapid rise in mortgage rates.”
Industrial Production
An index measuring the country’s industrial production grew 1.1% in April, according to the Federal Reserve. It was the fourth straight monthly increase for the index and more than twice what economists had expected. Production of automotive parts rose 3.3%, while output in the mining sector grew 1.6% in response to higher energy prices, economists said. An increase in the so-called manufacturing capacity utilization rate, to 79.2% from 78.6%, was seen as an indication the industrial sector is resolving its supply chain issues and that inflation in the price of tangible goods should slow the rest of the year. Economists said the surprisingly strong industrial production, along with the retail sales numbers, are encouraging signs that we will see gross domestic product grow again in the second quarter after it unexpectedly shrank in the first.
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