Retail Sales Stall As Ppi and Fed Surveys Signal Uneven Consumer Demand

More Information in Our Economic Calendar. Producer Price Index Slides: Does Soft Wholesale Pricing Confirm Demand Weakness? The Producer Price Index (PPI) for Final Demand Fell 0.5% in April, Its Largest Drop in Over A Year. Final Demand Services Drove the Decline, Down 0.7%, Led by Steep Margin Compression in Trade Services – Especialyally Machinery and Vehicle Wholesing, Whosh Sank 6.1%. Goods prices Were Flat, Despite Notable Declines in Energy (-0.4%) and Food (-1.0%).

Core Ppi, Which Excludes Volatile Food, Energy, and Trade Services, Edged Down 0.1%—Its First Decline Since April 2020. Year-Over-Year, The Index Rose. For Traders, The Combination of Weakening Services Prting and Soft Core Readings Raises Red Flags for Corporate Margins, Especialy in the Retail and Transportation Sectors.

Federal Reserve District Surveys Paint Mixed Regional Outlook The Philadelphia Fed’s May Manufacting Business Outlook Survey Signaled Ongoing Weakness, with The Current Activity Index at -4.0 -Up From -26.4 In April, Yet Still in CONTRACTION. New Orders Rebounded Into Positive Territory, But Shipments Declined Again, and Elegated Input Costs Remain A Concern. Still, Expectations for Future Growth Rose Sharply, with The Six-Month Outlook Index Climbing to 47.2.

In Contrast, The Ny Fed’s Empire State Index Droped to -9.2 from -8.1, Marking A Third Consecutive MONTHLY DECLINE. While New Orders Improved, Hiring and CONFIDENCE LAGGED. PRICES PAID SURGED TO 59.0, The Highest in Over Two Years, Complicating Any Dovish Outlook from the Federal Reserve.

Labor Market Steady But Not Strengthaning Initial Jobless Claims Held Steady at 229,000 for The Week Ending May 10, While The Four-Week Average Edged Up to 230,500. Continued Claims Also Rose Marginally, Suggesting The Labor Market Remains Stable But Is Not Tightling Further – A Critical Input For Fed Policy Expectations.

Outlook: Cautiously Bearish on Consumer and Retail-Driven Equities The Combination of Soft Retail Sales, A Declling PPI, and Weak Regional Manufacturing Data Suggests Headwinds for Consumer Demand and Corporate Revenue Growth. Despite isolated Signs of Resilience, Such as Steady Employment and Future Business Optimism in Philadelphia, The Broader Signal Leans Bearish in The Short Term for Consumer Disu. Traders Should Monitor Further Consumer Data and Fed Commentary Closely, Especiality with Inflation Pressures Divering Between Goods and Services.