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Big Data Week Ends with Retail Sales, Import/Export Prices & More

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Friday, May 14, 2021

A busy week for economic data concludes with another big set of metrics determining strength in the economy: Retail Sales, Import and Export Prices, Industrial Production and Capacity Utilization all hit the tape before the opening bell for the final trading day of the week, helping articulate where we currently stand. Or, rather, where we stood a month ago.

Retail Sales for April came in unchanged, missing expectations for 0.8% growth for the month. This follows a very strong March, which gained a downwardly revised +9.7% on stimulus checks being put to work on pent-up demand for goods. Ex-autos, this figure drops to -0.8% on the month, much lower than the +0.6% expected, and well off March’s downwardly revised +8.2%. The Control read was -1.5% for the month.

Analysts expect a shift from goods to services as the country continues to reopen. Mask policies are being relaxed for vaccinated citizens, who are now considered to be effectively immune from Covid-19. So far, roughly 59% of American adults have received at least one dose of the vaccine — getting closer to the 70% threshold that scientists expect would give us herd immunity here in the U.S.

The April Import Price Index came in a tad hotter than expected: +0.7% from +0.5% expected, though down from the upwardly revised +1.4% for March. A cooling off period had been expected after much pent-up demand had surged the previous month, though strength continuing is a good sign looking forward. Year over year, based on the historic pandemic pullback last year, we’re up 10.6%.

Exports were in-line with expectations: +0.8%, though down from the 2.4% recorded for March. And if you thought Imports had a big year-over-year comp, Exports were even bigger: +14.4%. We expect these yearly comparisons to remain gaudy through the spring and perhaps even the summer. However, what analysts will be paying closer attention to is where we go in trade from here. So far, so good.

Industrial Production (IP) reached +0.7% for the month of April, slightly off the 0.8% expected, though up huge on the year-over-year comp, which was -12.7% — the all-time low monthly IP number in more than 100 years of reporting. This headline is also down from the +1.4% originally posted for March. Capacity Utilization came in exactly as expected: 74.9%, up from the 74.4% originally reported for March.

Market futures are up for a second day, filling in gaps from the big sell-off earlier in the week. Less than half an hour before the opening bell, the Dow is +146 points, the Nasdaq +139 and the S&P 500 +26.

We’re beginning to look at this week not as a terrible bear claw slashing the market into ribbons, but more like a pause in the weeks-long trading method of going from growth to value and back again. As economic data and Q1 earnings season begin to wind down, we await the next catalyst.

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