Instant view: US economy sending mixed signals

14:49 18 April 2019
  • US PMIs disappoint on both fronts
  • Retail sales beats expectations in March
  • Philly Fed down again

US PMI indices echoed European counterparts as they signaled a slowdown in the US economy. April manufacturing PMI stayed at 52.4 pts defying expectations for an advance while services index slipped to 52.9 pts from 55.3 – a steep slide indeed.

Retail sales was very strong in March showing 1.6% m/m growth and 1.2% m/m growth excluding autos. This is partly a result of higher gas prices as ex-auto&gas sales was up 0.9% m/m doing not much more than recovering a 0.7% m/m slump in February. While retail sales is up 3.6% y/y this includes inflation and ex-auto&gas sales is flat over the past 4 months. Overall the spending data for March was a relief but not necessarily sign of a spending spree in the US.

Finally we also got two minor releases – US weekly jobless claims fell to a fresh 50-year low, this time to 192k – clearly showing that US companies are not shedding jobs but the Philly Fed business indicator for April unexpectedly backtracked to 8.5 pts. – the second lowest reading since the summer of 2016.

Overall the data-mix suggests that while the US economy (especially the consumer) is doing reasonably well for now – it’s on a clear slowing path.

US500 ignored weaker US PMI indicators. Source: xStation5

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