The US economic recovery has shown signs of confusion as shoppers curtailed spending last month and manufacturing slowed down due to supply bottlenecks.
According to government data released on Friday, after the shopping rush in March, US retail sales in April were flat and automobile sales increased, but in the midst of tight global semiconductor supply. Automobile production has declined.
Meanwhile, according to a private survey, consumer confidence has declined due to concerns over rising prices as the world’s largest economic resumption has driven speculation of a sustained rise in inflation.
Officials in President Joe Biden’s administration tried to downplay the fear of slowing recovery, but admitted that it could be bumpy months in the future.
Cecilia Rouse, chair of Biden’s Economic Advisory Board, said:
“Given the pandemic’s anomalous and unprecedented situation, it will still be difficult for analysts to accurately predict economic data until we recover more completely,” she told reporters.
The University of Michigan’s Consumer Psychology Index fell more than 6 points to 82.8 in May amid rising inflation concerns.
However, according to the survey, “despite rising prices due to stagnant demand and record savings balances, consumer spending will still increase.”
Concerns that the world’s largest economy is driving inflation surges include prices soaring as the economy resumes after the Covid-19 shutdown, including a 4.2% year-on-year rise in the consumer price index in April. Boosted by recent data showing what to do. Reported earlier this week.
According to economists, it reflects a backlash from price declines a year before the pandemic began, and is being pushed up by supply bottlenecks as the industry struggles to get back on track.
But the repeated guarantees of the Federal Reserve that the problem is temporary have not eased concerns.
Some price increases are due to unusual and temporary factors, such as rental companies buying cars to restock their cars, Rouse said.
“There will be some turmoil as the economy recovers,” she said, but the problem should not lead to inflation beyond the Fed’s control.
According to the Ministry of Commerce, retail sales last month were 620 billion as clothing, sporting goods, furniture, gasoline and even the surge in the e-commerce market were offset by increases in automobiles, electronics, food and healthcare. It was stable at a little less than a dollar. ..
The cooling-off occurred after a 10.7% surge in March compared to February, but total retail sales in April last year when the Covid-19 pandemic was first forced to shut down the world’s largest. The economy was more than 51% higher than the same month.
Pantheon Macroeconomics’ Ian Shepherdson called the April pause “a post-stimulation hangover after a March binge eating.”
The National Retail Federation (NRF) emphasized that despite consumers braking last month, sales remain strong and households are healthy.
“Consumers are willing to spend when they feel safe, showing that they are moving the economy forward,” NRF President Matthew Shay said in a statement.
“For the summer months, the economic recovery will continue to gain momentum,” he predicted.
According to the report, automobile and parts sales increased by only 2.9% per month, and retail sales actually decreased by 0.8%, excluding the automotive sector.
Sales at restaurants and bars increased by 3% as more Americans were vaccinated against Covid-19 and authorities relaxed mask and social distance restrictions, the report said.
Online sales fell 0.3%, a rare decline, up 29% from a year ago.
Meanwhile, the Federal Reserve Board said “supply chain difficulties” maintained US industrial output up 0.7% last month.
Global semiconductor shortages have forced automakers to slow down or shut down their factories, with Fed data showing a 4.3% drop in car and component production.
US Retail Sales Flat, Inflation Fears On The Rise Source link US Retail Sales Flat, Inflation Fears On The Rise