Retail Sales in America Reveal a Mixed Picture

Alan Penny

15 November 2019

3 min read

  • Retail sales came out of America early Friday morning
  • Mixed picture overall
  • Empire State Manufacturing Index released and misses
  • Capacity Utilization Rate misses as well

During the early hours on Friday, retail sales figures were released in the United States and were a bit of a mixed picture.  The Empire State Manufacturing Index and Capacity Utilization Rate figures were also released this week. Furthermore, Import Prices month-over-month came out as well.

The numbers

When the numbers came out, they were a mixed bag, to say the least. The retail sales figures MoM came out better than anticipated, at 0.3% as opposed to the expected 0.1% for the release. While this was bullish, core retail sales came out during the trading session as well, with a reading of 0.2%. This is less than the anticipated 0.3% figure. In other words, it appears that there are mixed signals coming from the retail part of the US economy.

This shows that manufacturing is slowing down in the northeastern part of the United States, which is not a good sign

Furthermore, the Empire State Manufacturing Index came out at 2.9, which was much lower than the predicted 6.1 figure. This shows that manufacturing is slowing down in the northeastern part of the United States, which is not a good sign.

Further driving that theme home is the fact that Capacity Utilization Rate is 76.7%, as opposed to the 77.2% that was suggested, and the Industrial Reduction MoM figures which came out at -0.8%, as opposed to the -0.4% expected This reinforces the idea that manufacturing is, in fact, slowing down

At this point, it appears that the economy in the United States is all over the place. That being said, none of these numbers are necessarily concerning.

What does it all mean?

It appears that there has been a bit of a short-term “manufacturing recession” in the United States, but we have seen that globally too so it’s not a huge shock. Beyond that, a certain amount of manufacturing is earmarked for the rest of the globe and, as it is slowing down in multiple areas, it is probably not surprising that perhaps the US manufacturing would slow down too.

What is probably more concerning is the retail numbers. Whilst they do tend to be somewhat volatile, at this point it’s not worth panicking as, at the very least, the US figures will be considered “less bad” than the rest of the world. Beyond that, we are getting close to the holiday season and typically this time of year most Americans are worried about spending money on holiday gifts instead of going out and simply buying as per usual. With that, people will start to take notice of the sales figures, and if they are poor through the month of November and December, then there will be a lot more fear about the US economy. At this point, it is something worth noting, but right now it doesn’t seem as if the whole thing is ready to fall apart.

Written By
Alan Penny

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