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The last couple weeks have had quite a few economic releases with both good and bad news.  Inflation is rising, finally, but is still under the Federal Reserve’s target.  Industrial production and capacity utilization decreased slightly in April, but the Trade Deficit shrank in March, while manufacturing surveys are giving mixed results.  Consumer Sentiment is falling, retail sales growth is slowing, but the amount of debt continues to rise – particularly student loans.  All in all it is a mixed picture for the economy.

This week has a couple important housing related releases: Existing Home Sale and New Home Sales.

News of Note


Headline inflation rose 0.3 percent in April and over the last twelve months CPI was up 2.0 percent.  Core CPI (excludes food and energy) increased up 0.2 percent last month and is up 1.8 percent over the last twelve months.[1]  The median CPI was up 0.3 percent and the trimmed mean CPI was up 0.2 percent.[2] For a nice take on why the rising inflation might be a good thing see Inflation is rising. Yay![3]

Inflation chart


  • Industrial production decreased 0.6 percentage points to 102.7 percent in April.  Capacity utilization decreased 0.7 percentage points to 78.6, which is 1.5 percentage points below the average from 1972 to 2012.[4].

Industrial Production Chart

  • The trade deficit decreased $1.5 billion to $40.4 billion in March as exports increased more than imports.[5]

U.S international Trade in Goods and Services Chart

  • The New York Fed’s Empire Manufacturing Survey indicated conditions for New York manufacturers improved significantly as the index increased 18 points to 19.0 in May.[6]
  • The Federal Reserve Bank of Philadelphia’s Business Outlook Survey decreased from 16.6 in April to 15.4 in May.[7]
  • The ISM non-manufacturing index increased 2.1 percentage points to 55.2 percent in April.  The largest increases were in the Business Activity/Production, Inventories, and the New Export Orders sub-indices.[8]


  • Retail sales in April increased 0.1 percent compared to March and were up 4.0 percent when compared to a year ago.  Excluding automobiles sales increased 0.6 percent. [9]
  • Consumer Credit increased by a seasonally adjusted $17.5 billion or 6.7 percent in March.  Revolving credit increased a seasonally adjusted 1.6 percent while non-revolving credit increased 8.7 percent.[10]
  •  The New York Federal reserve released their quarterly Household Debt and Credit report that showed a 1.1% increase from last quarter, but still 8.1% from the peak level in 2008.  One of the concerns being raised about the increase in consumer credit since the recession is the large increase in student loan debt and the problems it could present in the future, for a couple worthwhile reads see How Student Debt May Be Stunting the Economy and Student debt is going up. Graduates’ incomes aren’t.[11]
  • Consumer Sentiment fell to 81.8 in April, down from 84.1 in March.[12]



  • Single home housing starts increased 0.8 percent to 644 thousand SAAR in March.[15]
  • Mortgage purchase applications decreased a seasonally adjusted 1 percent and refinance applications increased 7 percent for the week ending May 9.[16]
[1] Consumer Price Index Summary, U.S. Department of Labor -Bureau of Labor Statistics, May 15, 2014, http://www.bls.gov/news.release/cpi.nr0.htm [2] Median CPI Up 0.3% in April, The Federal Reserve Bank of Cleveland, May 15, 2014, http://www.clevelandfed.org/Research/data/US-Inflation/mcpi.cfm?DCS.nav=Local [3] “Inflation is rising. Yay!” The Washington Post, by Ylan Q. Mui, May 15 2014, http://m.washingtonpost.com/blogs/wonkblog/wp/2014/05/15/inflation-is-rising-yay/?wpisrc=nl_wnkpm [4] G.17 INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION,  The Federal Reserve, May 15, 2014,  http://www.federalreserve.gov/releases/G17/Current/default.htm [5] Latest U.S. International Trade in Goods and Services Report, U.S Census Bureau, May 6, 2014, http://www.census.gov/foreign-trade/data/ [6] Empire State Manufacturing Survey, Federal Reserve Bank of New York, May 16 , 2014,  http://www.newyorkfed.org/survey/empire/empiresurvey_overview.html [7] April 2014 Business Outlook Survey, Federal Reserve Bank of Philadelphia, May 15,  2014  http://www.philadelphiafed.org/research-and-data/regional-economy/business-outlook-survey/2014/bos0514.cfm [8] April 2014 Non-Manufacturing ISM Report On Business, Institute for Supply Management, May 5, 2014,  http://www.ism.ws/ISMReport/NonMfgROB.cfm?navItemNumber=12943 [9] Advance Monthly Retail Trade Report, U.S. Census Bureau , May 13, 2014, http://www.census.gov/retail/index.html [10] G.19 Consumer Credit, The Federal Reserve , May 7, 2014, http://www.federalreserve.gov/releases/g19/Current/ [11] QUARTERLY REPORT ON HOUSEHOLD DEBT AND CREDIT, Federal Reserve Bank of New York, May 13, 2014, http://www.newyorkfed.org/newsevents/news/research/2014/rp140513.html “How Student Debt May Be Stunting the Economy”, The New York Times, by Neil Irwin, May 14, 2014, http://mobile.nytimes.com/2014/05/15/upshot/the-role-of-student-debt-in-stunting-the-recovery.html?wpisrc=nl_wonk&_r=0&referrer and “Student debt is going up. Graduates’ incomes aren’t.”, VOX, by Danielle Kurtzleben, May 14, 2014, http://www.vox.com/2014/5/14/5714546/student-debt-is-going-up-graduates-annual-salaries-arent?wpisrc=nl_wonk [12]Consumer Confidence in U.S. Unexpectedly Declined in May, Bloomberg.com, by Jeanna Smialek, May 16, 2014  http://www.bloomberg.com/news/2014-05-16/u-s-consumer-confidence-unexpectedly-drops-from-nine-month-high.html [13] Job Openings and Labor Turnover Summary, U.S. Department of Labor Bureau of Labor Statistics, May 9, 2014, http://www.bls.gov/news.release/jolts.htm[14] Unemployment Insurance Weekly Claims Report, U.S. Department of Labor, May 15, 2014,  http://www.dol.gov/ui/data.pdf[15] New Residential Construction, U.S. Census Bureau, May 16, 2014 http://www.census.gov/construction/nrc/[16]  Mortgage Applications Increase in Latest MBA Weekly Survey, Mortgage Bankers Association, May 14, 2014  http://www.mortgagebankers.org/NewsandMedia/PressCenter/88101.htm