Weekly Update: Week 15
This was a relatively heavy week of economic data including CPI, retail sales and industrial production.
Starting with retail sales, growth declined to 2% on a smoothed six-month annualized basis. It’s important to remember that retail sales is reported in nominal dollars.
After adjusting for inflation, real retail sales are declining at a 1.9% annualized pace, a level of growth consistent with past recessionary periods.
Retail sales is a volatile series. The growth rate of the six-month average shows that real retail sales has been sustainably contracting since November of 2022. The last two business cycle recessions were already underway at this level of smoothed retail sales growth.
Industrial production growth, another important coincident indicator, rose to 0.4% in March after spending three months in negative territory. The growth rate of industrial production was lifted by utility production, a non-cyclical sector driven by random weather patterns.
Utility production rose 8.4% in March, one of the largest monthly gains on record.
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