With the release of industrial production data (1.1% m/m vs. 0.5% Bloomberg consensus; mfg 0.8% vs. 0.4% consensus), we see April readings for another key indicator, closely followed by NBER BCDC .
figure 1: Nonfarm employment (dark blue), industrial production (red), 2012 personal income excluding transfers (green), 2012 manufacturing and trade sales (black), 2012 consumption (light blue), and 2012 Monthly GDP (pink) for January of the year, all log normalized to 2020M02=0. NBER defines recession dates, peaks and valleys, shades of gray. Source: BLS, Federal Reserve, BEA, via FRED, IHS Markit (nee Macroeconomic Advisers) (published May 2, 2022), NBER, and author’s calculations.
We also released April retail and foodservice sales figures today (consensus 0.9% m/m). Retail and foodservice sales are not the core series following the NBER BCDC (at least in previous years), but they can – and have been – used to inform views about consumption. I use the log-difference relationship between consumption and CPI — all contracted retail and food service sales — to forecast consumption in April. I also use the log difference of retail sales (deflated by PPI manufactured goods) to forecast March and April sales in the manufacturing and trade sectors. This produces the following picture.
figure 2: Nonfarm payrolls (dark blue), industrial production (red), 2012 personal income excluding transfers (green), 2012 manufacturing and trade sales (black), estimated sales for March and April ( Light black), February 2012 consumption (sky blue), April estimated consumption (light blue_ and January 2012 monthly GDP (pink), all log normalized to 2020 02 Month = 0. NBER-defined recession date, peak-to-trough, shaded in grey. Source: BLS, Federal Reserve, BEA, via FRED, IHS Markit (nee Macroeconomic Advisers) (published May 2, 2022), NBER, and author’s calculate.
Bottom line: The U.S. economy appears to have continued to grow in April, despite the negative quarter-over-quarter official GDP growth in the first quarter.
The extrapolated series and the m/m growth rate of the extrapolated series are shown in Figure 3.
image 3: Top panel, monthly/monthly growth rate of total consumer and retail and food service sales (contracted using CPI). Bottom panel, monthly/monthly growth rate of manufacturing and trade sales and retail sales (reduced using PPI). Source: Census calculated by FRED, BLS and authors.
