Economic Data Tracker –
Week 20

Economic Data Tracker

May 20, 2022

Retail sales strong in April

Trend watch and what’s new this week

New York City raised its COVID-19 Alert Level to high, which means that community spread and pressure on the health care system are increasing. Nationally, COVID-19 cases are climbing (slide 6). Also, the rate of hospitalizations and the percentage of COVID-19 patients are beginning to rise (slide 8). However, the death rate has largely held steady in recent weeks (slide 6). We will continue to monitor it.

Most of the travel-related activity-based data (slides 5 and 7) rebounded sharply this past week. Hotel occupancy rose and weekly air passengers top 15.5 million (slide 9). We also highlight travel bookings, which have essentially recovered to pre-pandemic levels (slide 10).

Among the other activity-based data, temporary staffing dipped WoW, though remains near the highest reading since mid-December 2021. Port traffic for 4 of the top 5 U.S. ports fell 4.9% in April (slide 11). But rail freight held steady during the latest week.

Retail sales –strong in April but shift to services is apparent

Total retail sales rose 0.9%, marking the fourth straight strong month. On slide 12, we show the comparison between the past three recessions and recoveries for retail sales. Retail sales are up 29% from pre-pandemic levels.

However, as was reported by two of largest big box retailers this past week, consumers appear to be shifting spending back towards services after two years of being skewed towards goods. This was also evident within the April retail sales figures. For instance, food service and drinking establishments sales jumped 2.0% in April, the strongest month since last June, while sales at general merchandise store edged up just 0.2%. Similarly, aforementioned rebound in travel-related spending within the activity-based data are also considered services.

Our take

The shift in consumer spending back towards services is happening. This is a key part of our thesis that goods inflation, which was simultaneously impacted by the pandemic with a massive surge in demand (because goods could be delivered despite social distancing) and supply chain disruptions. Accordingly, evidence is mounting that goods inflation is likely peaking and should continue to decline as the year progresses and this trend accelerates as spending normalizes. Moreover, softer economic growth –especially in Europe and Asia –will also contribute to more goods being available for the U.S. 

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