Last Week's Economic Numbers Were Not Encouraging

Last week, we received a some important numbers on the US economy.  Unfortunately, most were not good.

First, I covered retail sales here and drew the following conclusion:

The next 2-3 months of data are now very important in this series.  We need more data to determine if the gas story is the real story, or whether the general merchandise story continues.  We really need to keep an eye on auto sales; a drop there would be very damaging.

For now retail sales are flashing yellow.

Next up is producer prices:

The Producer Price Index for finished goods fell 1.0 percent in May, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Prices for finished goods moved down 0.2 percent in April and were unchanged in March. At the earlier stages of processing, prices received by manufacturers of intermediate goods decreased 0.8 percent in May, and the crude goods index fell 3.2 percent. On an unadjusted basis, prices for finished goods advanced 0.7 percent for the 12 months ended in May, the eighth straight month of slowing year-over-year increases following a 7.0-percent rise for the 12 months ended September 2011.

Part of this is good for consumers because it means they are not getting hit by inflation.  But it also means a lack of demand is lowering the price of raw materials, which is a signal of an economic slowdown.

And then we have CPI:

The Consumer Price Index for All Urban Consumers (CPI-U) decreased 0.3 percent in May on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 1.7 percent before seasonal adjustment.

The previous comments apply here as well.

We also got industrial production numbers from the Federal Reserve:

Industrial production edged down 0.1 percent in May after having gained 1.0 percent in April. A decrease of 0.4 percent for manufacturing production in May partially reversed a large increase in April. Outside of manufacturing, the output of mines advanced 0.9 percent in May, while the output of utilities rose 0.8 percent. At 97.3 percent of its 2007 average, total industrial production in May was 4.7 percent above its year-earlier level. Capacity utilization for total industry declined 0.2 percentage point to 79.0 percent, a rate 1.3 percentage points below its long-run (1972--2011) average.

The big hit here came from the consumer market, as none of the consumer industrial groups registered an increase.

And the Empire State Index dropped, but is still slightly positive:

The June Empire State Manufacturing Survey indicates that manufacturing activity expanded slightly over the month. The general business conditions index fell fifteen points, but remained positive at 2.3. The new orders index declined six points to 2.2, and the shipments index fell a steep nineteen points to 4.8. Price indexes were markedly lower, with the prices paid index falling eighteen points to 19.6 and the prices received index dropping eleven points to 1.0. Employment indexes also retreated, though they still indicated a small increase in employment levels and a slightly longer average workweek. Indexes for the six-month outlook were generally lower than last month’s levels, suggesting that optimism was waning somewhat, with the future general business conditions index falling to 23.1, its fifth consecutive monthly decline.

Right now, positive growth is hanging on by a thread.