Retail sales and industrial production improved in June, but data for the economy remain mixed. Overall, continued economic expansion remains the most likely path, but caution is warranted.
A recession could be coming tomorrow, or it could be coming in 10 years. The point is, we don’t know.
A variety of data released today suggest continued economic expansion. Despite concerns over trade policy, escalating trade wars, and global economic growth that are creating significant uncertainty, the outlook is cautiously optimistic.
The Manufacturing Purchasing Managers Index posted its third straight decline and lowest reading since October 2016. Mixed economic data continue to suggest a high degree of caution amid slow economic expansion.
Consumer sentiment fell slightly in June but remains at a high level while income and spending continued to grow in May. Tariffs and trade wars remain a significant risk.
New orders for durable goods decreased in May while core capital-goods orders rose; both appear to be plateauing amid rising uncertainty regarding the economic outlook.
Gains in retail sales and industrial production in May are a positive for the economy, but trade wars are impacting consumer attitudes and represent a threat to the economic outlook.
Small-business confidence rose in May while job openings remain at historically high levels in April. Both are positive signs for the economy despite the high level of uncertainty caused by erratic trade policy.
U.S. nonfarm payrolls added 75,000 jobs in May, pulling the four-month average down to 124,000. Employment is a coincident indicator and no one knows what will happen over the next year, but the weakness over the last four months suggests caution, not panic.
Reports from the Institute for Supply Management suggest continued economic expansion with elevated levels of concern over rising tariffs and shortages of labor.
Auto sales rose in May, and weekly data suggest consumer spending is solid. However, factory orders were weak in April. Currently, there is little hard data to suggest a recession is imminent. The outlook remains cautiously optimistic.
Initial claims remain very low in May, but revised data still show a poor performance for private domestic demand in the first quarter. Though economic data are still somewhat mixed, some recent positive signs are emerging.
New-home sales fell in April, and home construction is unlikely to contribute significantly to economic growth, but the strong labor market continues to provide a solid foundation for continued expansion.
Housing starts and permits improved in April, but the outlooks for the major segments vary widely.
Retail sales and industrial production fell in April, continuing the multi-month run of mixed results for the economy. However, continued economic expansion remains the most likely path.