ETF Action: Research

9.15.2022

Retail Sales increased 0.3% in August after declining 0.4% in July. 8 of 13 retail categories grew last month including a surge in sales at auto dealers

• Headline retail sales rose 0.4% to $683.3 billion in August, above consensus estimates of +0.0%
• Excluding autos & gas, sales also rose by 0.3%, below consensus estimates of +0.6%
• Sales at gas stations decreased 4.2% last month as gas prices fell to $3.70 on average per gallon according to AAA
• Gasoline stations were still up 29.3% year/year while nonstore retailers were up 11.2% year/year
• Importantly, year-over-year consumer spending is up 9.1% in August illustrating the resiliency of consumers amid rising prices
• These totals are not adjusted for inflation suggesting that spending outpaced price increases

9.14.2022

The Producer Price Index (PPI) decreased 0.1% month-over-month in August, above consensus estimates of -0.4%. All eyes remain on the Federal Reserve which is expected to announce a 75 bps or 1% interest rate hike next week to battle historically high nflation

• Headline PPI dropped 0.1% month/ month while Core PPI increased 0.2% month/month
• Headline PPI jumped 8.7% year/year, the lowest increase since August 2021
• After stripping out energy, food, and trade prices, core PPI rose 5.6% year/year
• Final demand services increased just 0.4% in August , the fourth consecutive monthly rise
• Final demand goods fell 1.2% in August after declining 1.7% in July driven by a 6.0% drop in final demand energy
• OVer 75% of the decrease in prices for final demand goods is attributable to the index for gasoline which fell 12.7%
• The PPI results coupled with the Consumer Price Index results announced last week indicate significant inflationary pressures have persisted adding to recession fears as the Fed continues its rate hike program

9.13.2022

The Consumer Price Index (CPI), a key inflationary measure, increased 0.1% in August and climbed 8.3% year-over-year as higher prices for shelter and food offset a sizeable decline in gasoline prices

• Headline inflation was up 0.1% month/month in August, above consensus estimates of -0.1%
• Year-over-year, headline inflation was up 8.3%, also above consensus estimates of 8.1%
• Inflationary pressures remain near record high levels following a 1.0% jump in May and a 1.3% increase in June
• Core inflation rose 0.6% month/month, above estimates of 0.3%
• The food index increased 0.8% in August, the 21st consecutive monthly rise. Year-over-year the food index is up 11.4%, the fastest increase since May 1979
• The energy index dropped 5.0% on the month as gasoline fell 10.6% in August. Year-over-year, the energy index is up 23.8%

9.8.2022

For the week ended September 3, initial jobless claims declined for the 4th consecutive week to 222K, a 3-month low

• Initial jobless claims were down 6K to 222K from the previous week's revised figures of 228K
• Continuing claims increased 36K to 1.473 million while the 4-week moving average rose 10.75K to 1.439 million
• Advance adjusted insured unemployment rate stood at 1.0%, unchanged from the previous week's figure
• The latest data is consistent with other recent gauges that show the U.S. jobs market is strong, but cooling from earlier in 2022, when hiring was more robust and layoffs were even lower
• The Federal Reserve currently has a 86% probibility of hiking another 75 bps at the September meeting according to the CME Group FedWatch Tool

9.7.2022

The goods and services trade deficit decreased $10.2 billion to $70.6 billion in July 2022 as the goods deficit decreased by $.2 billion to $91.1 billion while the services surplus increased $2.1 billion to $20.4 billion

• Trade deficit declined 12.6% in July to $70.6 billion
• Exports rose $0.5 billion (+0.2%) to $259.3 billion and imports decreased just $9.7 billion (-2.9%) to $329.9 billion
• The average goods and services deficit decreased $5.4 billion to $79.1 billion for the three months ending in July
• Year-to-date, the goods and services deficit has risen $136.6 billion, or 29.0%, from July 2021

9.6.2022

In August, the ISM Services increased just 0.2% to 56.9%, the 27th consecutive month of expansion. A reading above 50% indicates the services sector economy is generally expanding

• Services index rose to 56.9%, well above consensus estimates of 55.4%
• The Business Activity Index increased 1.0% while the New Orders Index jumped 1.4%
• The Prices Index decreased for the 4th consecutive month to 71.5%, but 17 service industries reported an increase in prices paid during the month of August
• The Inventories Index contracted for the third consecutive month while the Inventory Sentiment Index moved back into contraction territory in August
• 14 of the 18 industries reported overall growth. According to respondents, there have been improvements in supply chain, logistics, and cost improvements, however, challenges stemming from material shortages remain 

9.2.2022

The Employment Situation report indicated that the labor market remains strong, but job growth slowed after the blowout report in July which saw emloyment surge by 526K positions

• Nonfarm payrolls increased by 315K in August, well above consensus estimates of 293K
• The Unemployment Rate rose slightly to 3.7% and the number of unemployed persons increased by 344K to 6.0 million
• Sizeable job gains continued in professional and business services, health care, and retail trade
• The Participation Rate increased rose to 62.4%
• The number of employed persons that teleworked due to the coronavirus pandemic fell to 6.5% in August
• While inflation remains high ahead of the September meeting for the Federal Reserve, the labor market continues to be a bright spot 
• Last week, Fed Chairman Powell stated that the labor market was, "clearly out of balance, with demand for workers substantially exceeding the supply of available workers"

9.1.2022

For the week ended August 27, initial jobless claims dropped to 232K as the labor market remains relatively strong

• Initial jobless claims were down 5K to 232K from the previous week's revised figures of 237K
• Continuing claims increased 26K to 1.438 million while the 4-week moving average rose 4.5K to 1.429 million
• Advance adjusted insured unemployment rate stood at 1.0%, unchanged from the previous week's figure
• Despite concerns of an economic slowdown in the U.S., the jobs market has remained a bright spot indicating that hiring demand is strong and consumer spending has held up despite historically high inflation
• The Federal Reserve currently has a 76% probibility of hiking another 75 bps at the September meeting according to the CME Group FedWatch Tool