• AIM Team

NAM: Monday Economic Report

  • Consumer prices rose 0.6% in May, and over the past 12 months, the consumer price index has risen 4.9% (seasonally adjusted), the fastest growth since September 2008. Adjusting for the deceleration seen last spring, consumer prices have jumped 3.8% since February 2020.

  • Meanwhile, core inflation (which excludes food and energy) increased 3.8% year-over-year, the most since February 1993. Adjusting for the year-over-year “base effects,” core consumer prices have risen 3.3% over the past 15 months. As such, pricing pressures have accelerated sharply. For their part, manufacturers continue to cite rising raw material costs as a primary concern.

  • Consumer confidence rose from 82.9 in May to 86.4 in June, according to preliminary data from the University of Michigan and Thomson Reuters. Respondents felt more upbeat in their assessments of the economy, but they also felt more anxious about inflationary pressures.

  • U.S. consumer credit outstanding rose 5.3% in April, but revolving credit, which includes credit cards and other credit lines, fell 2.4%. Americans have been less willing to take on credit, with many paying down their existing balances. Indeed, revolving credit has fallen 5.5% year-over-year, or 11.8% since the end of 2019.

  • Moving forward, retailers (and manufacturers) will be looking for signs of an increased willingness to take on revolving credit, which would likely correlate with increased consumer spending.

  • Manufacturing job openings soared to 851,000 in April, a new record. In the larger economy, nonfarm business job openings jumped to 9,286,000 in April, also an all-time high. There are currently 1.06 unemployed workers for every one job opening in the U.S. economy.

  • In addition, the number of quits in the manufacturing sector rose from 262,000 in March to 284,000 in April, the most since January 2001. Similarly, nonfarm business quits increased from 3,568,000 to 3,952,000, a new record.

  • In the May survey from the National Federation of Independent Business, 48% of small business owners said that they had job openings they were unable to fill, a new record. Indeed, 57% of respondents said that there were not enough qualified applicants for job openings, up from 54% in April and an all-time high. The percentage of respondents planning to increase hiring over the next three months rose from 21% to a record 27%.

  • After hitting an all-time high in March, the U.S. trade deficit pulled back somewhat in April, with goods exports rising to a new record. Growth in goods exports has outpaced the increase in goods imports year to date, reversing the trend seen since February 2020, where imports have recovered faster than exports.

  • In a sign that export trade is recovering after a rough 2020, U.S.-manufactured goods exports have risen 6.77% through the first four months of 2021 relative to the same period last year.