Import prices were 16.7 percent (annualized rate) in April, reflecting a surge in the import prices of petroleum and petroleum products, which more than doubled (at an annualized rate) for the second straight month. However, import prices for petroleum and petroleum products remain 1.8 percent down from levels last April. Nonpetroleum import prices rose 2.3 percent in April, a bit down from their 12-month trend (2.9 percent).
The nominal trade deficit increased $6.0 billion to $63.9 billion in March, as a 1.8 percent increase in exports was more than offset by a 4.5 percent increase in imports, the largest monthly rise since late 2002. Imports of goods, which generally account for about 85 percent of overall imports, jumped 5.1 percent during the month. Of that gain, roughly half can be attributed to imports of petroleum products, which rose 17.6 percent in March.
The Producer Price Index (PPI) jumped 9.1 percent (annualized rate) in April, following two months of brisk growth (16.9 percent in February and 12.5 percent in March). April's increase reflected a nearly 50 percent surge in energy prices. Meanwhile, the core PPI was unchanged for the second straight month. Crude nonfood materials less energy rose a mere 4.3 percent--down from the average annualized monthly growth rate of 66 percent since the beginning of this year--reflecting declines in steel scrap and wastepaper prices.
Total retail sales dropped 2.7 percent (annualized rate) in April, but are up 3.2 percent on a year-over-year basis. Retail sales growth excluding auto sales were essentially flat (down 0.2 percent) during the month, following an average monthly growth rate of about 5 percent during the preceeding 12-months. Declines in building material, general merchandise, and clothing and accessory store sales offset monthly sales growth among furnishing and home, electronic and appliance, food and beverage, gas station, and nonstore retailers.
The Consumer Price Index was still "elevated" in April, rising 5.1 (annualized rate). The CPI excluding food and energy rose 2.1 percent, up from its negligible increase in March and just a bit below its 12-month trend. However, the trimmed-mean inflation measures were a bit more encouraging: The monthly increases in the 16% trimmed-mean CPI and the median CPI decelerated from their longer-term trends, registering 2.5 percent and 2.1 percent, respectively.
Single-family-housing starts increased 1.6 percent (nonannualized) in April, their third straight monthly increase. However, housing starts remain low when compared to levels seen over the previous five years and are currently down 33.3 percent from their historical peak in January, 2006. Moreover, permits for single-family-housing units, an indicator of future construction activity, fell by 5.0 percent over the month (the largest decline in over 5 years). Despite the recent increase in starts, permits have yet to show any signs of strength and are currently down about 40 percent from their recent peak.
Industrial production rose 0.7 percent in April, following a 0.3 percent decline in March. Manufacturing output rose 0.5 percent in April, reflecting increases in the production of motor vehicles and parts and in high-technology goods. Utilities output rose 3.5 percent, reflecting unseasonably cooler temperatures in April. Production in all major market groups rose in April: Consumer goods production rose 0.9 percent in April, following a 0.8 percent decline in March, and is up 2.4 percent on a year-over-year basis. Business equipment production rose 0.9 percent for the second straight month and is up 5.7 percent on a year-over-year basis.
The Consumer Sentiment Index ticked up in May, from 87.1 to 88.7, reflecting deterioration in the current economic conditions component that was more than offset by an improvement in consumer expectations. Short-term average inflation expectations in early May reached 4.2 percent, their highest level since last summer, while expectations of inflation over the next five to ten years remained at 3.6 percent, a bit above the range in which they have generally fluctuated throughout the past decade.
Existing single-family-home sales fell 2.4 percent in April, following March’s 9.0 percent decline. April's decline brings the series down to its lowest level since early 2003 and 17.1 percent below its peak in September 2005. The median sales price of existing single-family homes increased 2.0 percent (to $220,500), the third consecutive monthly increase.
New orders for durable goods continued to climb in April, rising 0.6 percent (nonannualized rate) following a 5.0 percent increase in March. Nondefense capital goods excluding aircraft rose 1.2 percent during the month, following a 4.4 percent rise in March. Shipments of durable goods were up 1.9 percent in April and posted their first year-over-year gain since November 2006, rising 2.2 percent.
New single-family-home sales increased 16.2 percent (nonannualized) in April, after falling in each of the previous three months. The increase, which was the largest monthly gain since 1993, was led primarily by the South, where new single-family-home sales increased 28.8 percent. Since peaking in July 2005, new single-family-home sales have fallen steadily: Even with April’s unusually large increase, the series is still down nearly 30 percent from its peak.
New factory orders rose 3.1 percent in March, exceeding expectations for 2.1 percent growth, while new orders in durable goods industries rose 3.7 percent. The growth in March's durable goods orders reflected a 9.5 percent increase in transportation equipment, which was largely caused by a 38.1 percent spike in nondefense aircraft orders. Factory orders excluding transportation orders, which had fallen in six of the previous seven months, increased 1.9 percent in March.
The ISM Manufacturing Index rose from 50.9 in March to 54.7 in April, reflecting broad-based increases among the index's components: An index value over 50 indicates an expanding manufacturing sector. New orders, prices, and the backlog of new orders posted gains of nearly 7 percentage points or more. Inventories continued to decline, falling from 47.5 in March to 46.3 in April, marking the series' ninth consecutive month below 50.