April Economic Data: PPI Falls, Retail Sales Mixed, Jobless Claims Steady

April PPI and Inflation Data

• 📉 The Producer Price Index (PPI) for April unexpectedly fell by 0.5%, the largest monthly decline since April 2020.
• ⚠️ Core PPI (excluding food and energy) also decreased by 0.4%, marking the weakest reading in this series.
• 📊 Year-over-year final demand PPI slowed to 2.4%, the lowest since September of the previous year.
• 📈 Core PPI year-over-year remained at 3.1%, showing less progress.

Retail Sales Performance

• 🛒 Retail sales showed a modest increase of 0.1% in April, with a positive revision for the previous month.
• ⛽ Excluding autos and gas, retail sales rose by 0.2%, also with a positive revision.
• 🛍️ However, the control number (core retail sales) disappointed, falling by 0.2%, the second weakest reading of the year.

Manufacturing and Labor Market

• 🏭 The Empire Manufacturing index for May came in at -9.2, weaker than anticipated and the lowest since March.
• 💼 Initial jobless claims remained steady at 229,000, close to expectations and unchanged from the prior week.
• 📉 Continuing claims fell back below 1.9 million, returning to levels not seen since November 2021.

Philly Fed Business Outlook

• 💡 The Philly Fed Business Outlook survey for May showed a significant improvement, coming in at -4, much better than the expected -26.
• 📈 This reading is the best since March, indicating a less negative sentiment among businesses in the region.

Market Reaction

• 📉 Despite the PPI data, market reaction was muted, with yields on the 10-year Treasury falling slightly to around 4.49%.
• ⚠️ The speaker suggests that markets may not fully trust the data, particularly the PPI, which is often seen as a weaker indicator than CPI.