WASHINGTON (MNI) - The latest economic data suggest weak sales though the Q2 arithmetic looks good, few layoffs, and no price problems.
U.S. May retail sales data were weaker than expected but huge up-revisions to April tempered the problem.
May retail sales posted +0.3%, and ex-autos +0.1%, both worse than analysts' projections. April sales levels were revised significantly higher, however. So Q2 growth is stronger, with ex-autos at nearly +5% SAAR, suggesting a Q2 GDP rebound remains in place.
The trajectory is poor as sales are pointed lower going into June. Consumption in Q2 still could end on a weak note if June does not rebound. As the data stand, a surge in sales in March followed a severe winter; consumers then moderated their spending in April and May.
May sales weakness was seen in electronics at -0.3%, food -0.1%, clothing -0.6%, and restaurants -0.2%.
Autos and parts posted +1.4% as new unit sales jumped. Building materials posted +1.1% and furniture +0.5%. Gasoline stations were +0.4%. Core sales were flat, or -0.1% ex-gas for May.
In another report, initial unemployment claims advanced 4,000 to 317,000 in the June 7 week, with no special factors.
The 4-week average for claims is 315,000 and the May average is 313,000, so layoffs are steady and low levels of claims are suggesting a revival in the labor market.
In a third report released at the same time, May import prices were up 0.1% for +0.4% over the year, lower than expected and showing no price pressures.
Excluding fuel, import prices were flat and -0.2% over the year. Fuel imports posted +0.5% but foods and nonfuel supplies fell.
It is worrying that over the past 12 months the fuel import index is up 3.0%, its largest such gain since August 2013. It was led by petroleum imports, but the nearing peak of the summer driving season has not resulted in the same price jump at the retail level, and demand soon should wane.
Imports from China posted +0.3%, led by computers. From Japan imports were -0.1%, and from Canada -0.8% on lower natural gas. EU import prices were +0.3%.
Export prices were +0.1% and non-agricultural exports +0.1%, also very modest numbers. Over-the-year rates were +0.5% for all exports (the largest gain since last June) and a similar +0.5% for non-agricultural.