Economic Update 06/15/15

SPRING SEES MORE SHOPPING

Last week, the Commerce Department announced a 1.2% jump in retail sales for May, topping the 1.1% rise forecast by analysts polled by Briefing.com. Driving the improvement: a 3.7% leap in gas station sales. Purchases increased 2.1% at home improvement outlets, 2.0% at auto dealers and auto parts stores, 1.5% at clothing shops and 1.4% at online retailers. April retail sales were revised from flat to +0.2%, and that makes three straight months of gains.

WHOLESALE INFLATION INCREASES 

Rising gasoline and egg prices influenced the 0.5% gain in the Producer Price Index for May – its largest monthly advance since fall 2012. The core PPI (which strips out energy and food items) rose just 0.1% following April’s 0.2% retreat.

A NICE CONSUMER SENTIMENT SURPRISE

The University of Michigan’s respected consumer sentiment index – which ended May at 90.7, its poorest reading since December – exceeded Wall Street expectations. Instead of a slight gain, the preliminary June edition of the index rose to 94.6.

MIXED WEEK FOR THE MARKET

As the closing bell sounded June 12, the three major U.S. stock indices were little changed from the previous week. Across five trading days, the S&P 500 gained a total of 0.06% to reach 2,094.11, the Dow rose 0.28% to 17,898.84 and the NASDAQ lost 0.34% to fall to 5,051.10. Crude prices rose 1.4% on the NYMEX during the week to a $59.96 Friday close; as for gold, it gained 1.0% in five days to settle at $1,179.20 Friday, snapping a three-week losing streak.

THIS WEEK: Monday, Wall Street eyes a Federal Reserve report on May industrial output. On Tuesday, the Census Bureau issues a report on May housing starts and building permits, and earnings arrive from Adobe Systems, Bob Evans Farms and La-Z-Boy. The Fed issues its latest policy statement Wednesday, with investors also evaluating earnings reports from FedEx, Jabil Circuit, Oracle and Pier 1 Imports. May’s Consumer Price Index comes out on Thursday, along with a new initial claims report, the Conference Board’s latest set of leading economic indicators and earnings from Darden Restaurants, Kroger, Rite Aid, Smith & Wesson and Red Hat. CarMax and KB Home report earnings on Friday.