MetroIntelligence Economic Update by P. DUFFY
Retail sales slump 1.9 percent in December, but still up 16.9 percent year-on-year
Advance estimates of U.S. retail and food services sales for December 2021 were $626.8 billion, a decrease of 1.9 percent from the previous month, but 16.9 percent above December 2020. Total sales for the 12 months of 2021 were up 19.3 percent from 2020. Total sales for the October 2021 through December 2021 period were up 17.1 percent from the same period a year ago.
Industrial production slips 0.1 percent in December, but still up 3.7 percent year-on-year
Industrial production declined 0.1 percent in December. Losses of 0.3 percent for manufacturing and 1.5 percent for utilities were mostly offset by a gain of 2.0 percent for mining. For the fourth quarter as a whole, total industrial production rose at an annual rate of 4.0 percent. At 101.9 percent of its 2017 average, total industrial production in December was 3.7 percent higher than it was at the end of 2020 and 0.6 percent above its pre-pandemic (February 2020) reading. Capacity utilization for the industrial sector edged down 0.1 percentage point in December to 76.5 percent, a rate that is 3.1 percentage points below its long-run (1972–2020) average.
January Consumer Sentiment Index falls to second-lowest level in decade
Consumer Sentiment posted a small loss in early January (-2.5%) and was down 12.9% year-on-year, falling to the second lowest level in a decade, which was recorded in November (67.4). While the Delta and Omicron variants certainly contributed to this downward shift, the decline was also due to an escalating inflation rate. Importantly, confidence in government economic policies is at its lowest level since 2014. The most crucial and difficult task will be defusing the developing wage-price spiral.