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Econ Data, Coronavirus Assessment Ahead of 3-Day Weekend

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Friday, February 14, 2020

January Retail Sales came in as expected this morning, posting a headline of +0.3% while the previous month’s revision ticked down 10 basis points. Stripping out volatile month-over-month auto sales, the +0.4% is 10 basis points better than anticipated. December’s ex-auto read also came down slightly from its initial report. Weaker results from Clothing/Accessories weighed on the results, likely due to warmer winter conditions nationwide last month.

Where we see some retail weakness is in the January Control number, where further volatile commercial segments are removed to give a truer read to the core Retail figures. These include autos, building materials, gas stations, office supplies, mobile homes and tobacco shops. This Control figure reached just 0.0%, down from the +0.3% expected. December’s originally reported +0.5% has been ratcheted down to +0.2%.

The Import Price Index for January also registered a “goose-egg,” 0.0%, down from the previous month’s downwardly revised +0.2%. Ex-petrol prices, we see this number bounce back to a better-than-expected +0.2%. Year over year, Import Prices are up just +0.3%. Exports, on the other hand, saw a big jump in January, from -0.1% expected to +0.7% reported month over month. Year over year, Export Prices are up 0.5%.

Industrial Production for January met expectations of -0.3%, following -0.3% reported a month ago as well. Capacity Utilization was also in-line with estimates at 76.8% for January, down from the slightly upwardly revised 77.1% in December. The last time factory capacity fell south of 77% was back in October of last year. Both these sets of numbers depict weakness in U.S. manufacturing, which does not come as much of a surprise considering previous manufacturing data results.

With a three-day weekend ahead of us (due to Monday’s observance of Presidents Day, during which the stock market will remain closed) and few concrete answers regarding the COVID-19 coronavirus, it may be difficult for stocks to hold onto the slight positive sentiment we see in this morning’s pre-market trading. The major indexes are up somewhat, though look to have some negative momentum heading into the opening bell.

Mark Vickery
Senior Editor

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