Economic Collapse

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9:15a Industrial Production
Production - M/M change -0.5% actual vs 0.2% (rev) prior
Manufacturing - M/M -0.5% actual vs 0.0% prior
Capacity Utilization Rate - Level 77.9% actual vs 78.5% (rev) prior
Highlights
Like retail sales earlier this morning, the headline 0.5 percent decline for April industrial production is not masking strength underneath. Also falling 0.5 percent was production at manufacturers which is even more unexpected than the headline decline.
Motor vehicles and parts, where consumer sales have been mostly soft this year, fell 2.6 percent in April for a second monthly decline and year-over-year contraction of 4.4 percent. Business equipment fell 2.1 percent in the month for yearly growth of only 0.1 percent which doesn't point to acceleration for business investment. Consumer goods also fell, down 1.2 percent in the month with construction supplies up only 0.1 percent that follows March's 1.7 percent dip in readings that don't point to strength for construction in general. Selected hi tech is a positive for April, up 0.6 percent with annual growth here at 3.2 percent.
Also positive is a 1.6 percent jump in mining volumes which rose 1.6 percent in April that follows, however, three straight months of declines. Output at utilities fell 3.5 percent in April with the yearly rate of minus 4.7 percent also pointing to general industrial weakness.
However tight the US labor market may be, capacity does not appear to be tight in the industrial sector as capacity utilization fell 6 tenths in April to a much lower-than-expected 77.9 percent. Utilization in the manufacturing sector is down 5 tenths to 75.7 percent.
This report doesn't breakdown production of goods aimed for the domestic market and those for the foreign market but it will nevertheless offer a baseline for the overall effects of increased US-China tariffs. Going into those tariffs, the manufacturing sector, which first began to slow late last year, appeared to be flat at best.


10:00a Atlanta Fed's Business Inflation Expectations
Yr/Yr 2.0% actual vs 1.9% prior
Highlights
After holding at 1.9 percent the last three reports, inflation expectations at the business level edged 1 tenth higher to 2.0 percent in data for May. Today's results are consistent with the Federal Reserve's assessment that inflation expectations, which they watch very closely, have been little changed this yea


10:00a Business Inventories
M/M change 0.0% actual vs 0/3% prior
Highlights
The build that was forming in December and January, when business inventories swelled by 0.9 and 0.8 percent, dissipated by March. Business inventories came in unchanged in the month following a manageable 0.3 percent rise in February.
Inventories year-on-year were up 5.0 percent which is only 1.3 percentage points above the 3.7 percent growth rate in underlying sales. This spread had widened to 2.5 percentage points in prior reports. The inventory-to-sales ratio reflects this moderation, down 2 ticks in March to 1.37 which is only 1 tenth higher than March last year.
Inventory growth was a solid contributor to first-quarter GDP and the growth looks to have been healthy, not out of line with sales in what is a general and significant positive for the second-quarter outlook.


10:00a NAHB Housing Market Index
66 actual vs 63 prior
Highlights
In a welcome indication of strength during the Spring sales season, home builders are more positive about conditions. The housing market index topped Econoday's consensus range with a 3 point gain to 66. Readings of 72 each for present sales and 6-month sales lead the report with traffic also improving but still lagging behind at 49.
Regional data show the West and South out front, which are the two most focused regions for home builders, with the Northeast and Midwest well behind but still rising at respectable rates.
Housing data have been uneven this year but have shown some bright spots which now include today's housing market report. In tomorrow's housing starts report for April, both starts and permits are expected to show improvement.


10:30a EIA Petroleum Inventories
Crude oil inventories [weekly change] 5.4M barrels actual vs -4.0M barrels prior
Gasoline [weekly change] -1.1M barrels vs -0.6M barrels prior
Distillates [weekly change] 0.1M barrels actual vs -0.2M barrels prior

Oil inventories can fluctuate dramatically over time based on changes in domestic and foreign oil production together with changes in domestic demand. On a weekly basis, changes in inventories can result in immediate price action in oil with draws tending to lift oil prices and builds tending to lower oil prices.
Data Source: Haver Analytics