US Retail Sales, Industrial Production, Manufacturing New Orders

Nominal retail sales data is typical of a recessionary environment, but much of this is due to declining gas prices.  Manufacturing output and new order data is also typical of recessionary conditions.   Motor vehicles and parts sales/new orders/output are still strong data points albeit showing signs of weakening, especially in the auto components.  Cycle to cycle we see retail sales, orders and output all failing to establish a clear positive post crisis fundamental growth trajectory.   That said there does not appear to any abrupt collapse in the data which is not necessarily a positive.

Retail Sales

Nominal retail sales excluding Motor Vehicles and Parts have been noticeably weak over the year:

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Most the recent decline has been due to falling gas prices:

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Motor vehicles and parts have been a stand out:

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Recent data suggests this component’s growth rate has been slowing:

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Total retail sales have decelerated noticeably since the summer although the annual rate is still benefitting from earlier rises:

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And of interest is the recent weakness in retail sales ex Gas and Motor Vehicles and Parts:

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Smoothed 6 monthly nominal data clearly shows a weakening cycle:

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Real retail sales per capita have also failed to recover the highs of the previous cycle and highlight underlying fundamental demand weakness (To Nov re CPI adjustment):

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Of note is the divergence between retail sales and income growth: does this signify a downturn as opposed to slower growth?

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We can see the accumulated differential since 1992: prior to the financial crisis retail sales growth exceeded disposable income growth but has since turned to deficit, although the accumulated deficit is marginal.

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New orders

Manufacturing orders remain in recession territory on a smoothed data basis:

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Short term bursts in new orders need to be compared against the more important capacity issues raised by smoothed data analysis:

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Quarterly and monthly rates show a recent uptick still dwarfed by year on year changes:

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Durable goods order levels reached a peak in late 2014, fell back significantly and look to be reverting to a lower though stable trend:

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Annual change in PPI is still deeply negative:

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And order data needs to be viewed on both a nominal and a real basis (note that PPI and new order prices are not synchronised)

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Despite the recent uptick, growth in orders remains weak historically:

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Ex defence and transport the trend in durable goods orders is a negative one:

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And on a longer term view:

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Manufacturing/Industrial Production

And the clincher: the annualised rate of growth over 5 year rolling time frames from high water mark levels: 

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As previously noted there are two trends in the data we see: a slowdown from raised rates of activity experienced in 2014 and a decline in activity associated with a decline in global trade and manufacturing in general:

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Industrial production is clearly in recession territory:

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And the long term trend remains weak:

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Weakness in mining, machinery is significant and we see are seeing a decline in motor vehicle and parts growth too:

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In particular we see considerable weakness in the auto production component of Motor Vehicles and Parts:

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