Economy Alert: Retail Sales and Industrial Production Slump In April

by | May 15, 2019 | Headline News | 14 comments

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    The Federal Reserve announced Wednesday in a downbeat report that the United States’ industrial production slumped in April. The Fed’s report also included sharp downward revisions for other important segments of the U.S. economy.

    According to Market Watch, capacity utilization fell sharply to 77.9% from an upwardly revised 78.8%. Most major market groups reported worse production in April, the Fed said. There were drops in automotive, chemical products and consumer energy products. Excluding autos, manufacturing production fell 0.3%. Data on retail sales was also released yesterday and it had shown a 0.2% decline when economists had estimated a .2% spike.

    “Manufacturers have without question borne the brunt of the negative impacts from the imposition of tariffs, the retaliation from China, and the uncertainty regarding the outlook for trade policy. Factories have also been hit by the strengthening in the dollar last year,” said Stephen Stanley, chief economist at Amherst Pierpont Securities.

    “Today’s data on both IP and retailing lean the same way, towards a softer second-quarter growth rate that will essentially cancel out the upside surprise we saw in [the] first-quarter GDP,” said Avery Shenfeld of CIBC Capital Markets.

    Consumers appear to be running out of steam. The slump in retail sales appears to be decreasing quickly in autos and in-store purchases of sporting goods, hobby supplies, and musical instruments. Motor vehicles and parts, a major swing factor in the monthly data, fell by 1.1%, according to the report.  Not too long ago, there were reports out detailing the difficulty car dealerships were facing.

    Non-store retailers, which includes internet shopping, saw a 0.2% decrease in sales, according to a report by The Street. According to Ian Shepherdson, chief economist for the forecasting firm Pantheon Macroeconomics, this means that we didn’t get off on the right foot economically in the second quarter.  “These data mean that the second quarter started poorly,” Shepherdson wrote in a note to his clients.

    This could mean we are heading for a slow decline in the U.S. economy too, as opposed to falling into a depression overnight. But it is still hard to say exactly how the next collapse will look. Either way, neither outcome will be fun.


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      1. Maybe some are running out of steam. I believe that most are buying from the internet and the brick and mortar stores continue to close up and then bought up by the likes of Amazon

        • How can retaliation from China be a factor ALREADY ??? It can’t.

          The business cycle is over and would have ended two years ago had TRUMP not goosed the economy with his tax policy giving businesses the ability to buy new plant and equipment and depreciate it in the first year.

          With American consumers over burdened with debt, expect a PAUSE in the economy as consumers regroup and pay down debt; while importers and manufacturers source new suppliers, globally.

          The Rise of China is over. 🙂

          • Durangokidd, you think the rise of China is over? Cognitive dissonance is bliss.

            As Gerald Celente stated, ‘The business of China is business. The business of America is war’. Search for images of Shanghai shipping port and you will see thousands of CONEX shipping containers full of exports. Search for American ports and you’ll see tanks and Humvees. China is growing while America is bleeding out.

            • China has achieved economic parity with America and that parity is dependent upon the continued trade imbalances that China has enjoyed with the US for decades.

              The party is over for China. If it continues to rise it will do so on its own merits rather than the economic welfare that has propped up its growth for the past three decades.

              Trump recognizes the danger to the USA from the trade imbalances that China has enjoyed and he is pulling the plug. Rank & file Americans agree with him.

              There will be a real cost to the American economy as the US & China decouple, and that will likely cause a recession: a needed pullback, btw, to realign America’s trade with American security interests.

              The cost to China will be far, far greater and may lead to chaos in China. Certainly it will lead to social unrest from the certain financial chaos there, but whether that leads to political chaos remains to be seen.

              Eventually it will lead to war because China is not going to voluntarily give up its advantages; advantages that were given to it by the NWO when they held power in the US.

              Better to go to war with Chjina now while the USA has the military advantage, then ten years from now. 🙂

      2. Labor revolutions:
        Agriculture ->
        Cottage industries ->
        Mass production by plutocrats ->
        Mass production by the individual

        The “industrial production,” which we normally imagine — in our imagination — has not literally existed in this country since the days of my great grandfather.

        Carts on the industiral rails have been planted with flowers, the factories converted to bistros, campy theaters, and apt lofts.

        Unless you work pretty directly for the welfare or police state, you are being sustained by one of the gray markets, like shown in the ‘drain the swamp’ video.

        The last several new cars, designed for obsolescence with your name on it, have been rotting in huge acreages of new cars. The store will now be closing.

        • Bought a new car last Saturday. Traded the minivan in. Don’t get what I wanted for it. It had some electrical issues. Ever since we had the aftermarket remote start installed we had all kinds of electrical problems. Drove it 100k miles. Will never have aftermarket installs on another vehicle ever again.

      3. So Mac, what is your point? Most people are aware we are in the middle of ‘negotiating’ with the Chinese in an effort to get them from continuing to eat our lunch. Shall we set back and enjoy them doing that for a few more years and then what? Or do we do what is prudent in order for us to get on a more equitable trade basis with China? Your call.

      4. The sales in sporting goods, hobby goods, and musical instruments have dropped sharply. These products are essential.

        Hobbyists can turn their skills into tools for bartering; or, become the basis of a successful business of one’s own (artists, dressmakers, etc).

        Sporting can be your means of staying physically fit. Sporting and camping is survival in a time of crisis, and a joyful passion. When things get tough, the tough go fishing.

        Music feeds the soul. Every child, well practically every child, needs to play at least one musical instrument.

        I find it appalling that people will buy their kids tons of crap instead of giving the child music lessons. It is damn near child neglect.


      5. Unless you are in the top 1 % in music you can hardly feed yourself in music today and absolutely not a family. It’s been like this since the 80’s. Other than that, without creative math it has been in a real, inflation adjusted, downturn since 2008. If they can’t cook the books to show a gain now you know it really must be bad. It’s hard to trust any numbers submitted by the government regarding economic statistics. The labor participation rate is full evidence of this.

      6. Honeypot, agreed. I only invest my spare money in things that help me to stay alive. It gives me something called ‘peace of mind’. That’s something SHEEPLE will never understand.

      7. The stories here are too predictable, endless rehash of same old stories done a year or three ago.

        I suppose the next in the SHTF story rotation will be how commercial real estate collapse is immanent along with a 1991 stock photo of a closed down mall.

        Or how the middle class is gone, BAHAHA,

        You know more than half the people have great paying jobs and they actually go to work!

        I don’t feel sorry for those that refuse to work and cite pity for their poorness.

        The problem is obesity. I doubt food production is falling, especially of carbohydrates. Just look at the American adults and their children. No no economy is hurting

      8. Slow time of year.. Most people who got tax money back have spent or are saving it. Those that owed money have little left to throw into the economy and are buying necessities only. Next quarter should give a better idea.

        • That and the first quarter is a bad one in general. No major holidays, the worst weather, and post-Christmas returns to boot.

          The second quarter features better weather and what “The Simpsons” referred to as the “Mom-Dad-Grad Gift Corridor,” for the Mother’s Day, Father’s Day, and graduation appearances. It’s one of the biggest shopping seasons in a year, beside Back to School and what “The Simpsons” also called the “Christmuhanakwanzaa Spend Phase.”, or “Holiday Shopping Season” for the less cynical.

      9. Checked the Baltic Dry Index yesterday. It was at about 1050. I’ve seen it below 300. I’ve also seen it much higher.

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