Hmmm....

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for April, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $419.0 billion, an increase of 0.1 percent (±0.3%)* from the previous month, and 3.7 percent (±0.7%) above April 2012. Total sales for the February through April 2013 period were up 3.7 percent (±0.5%) from the same period a year ago. The February to March 2013 percent change was revised from -0.4 percent (±0.5%)* to -0.5 percent (±0.2%).

Note that February to March was revised down; this of course makes a 0 into a +0.1%.

Let's look inside the unadjusted figures, which is where I always go as they're counts and not subject to "let's add our own personal fudge factor to the number!" games.

Down this month were autos, furniture, electronics, food, health and personal care, gasoline, clothing, sporting goods, general merchandise, miscellaneous retailers, internet retailers and food and drinking establishments.  What was up?  Building supplies.  That's it.

Some of the changes on an unadjusted basis were colossal.  Electronics were off 11%.  Food and beverage stores (groceries) were off 7.5% (!!)  Gas was off about 4%, but remember that gas prices have been coming down, so the volume is likely close to unchanged.  And internet-based sales were down 1.2%.

Sucks?  Oh yeah -- but for "adjustments" the real figure was -2.6% for April.

You judge whether the "adjustments" are warranted -- or pure crap.

This isn't particularly newsworthy -- but it does illustrate that a potential wall may have been hit.

Nonfarm business sector labor productivity increased at a 0.7 percent annual rate during the first quarter of 2013, the U.S. Bureau of Labor Statistics reported today. The increase in productivity reflects increases of 2.5 percent in output and 1.8 percent in hours worked. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the first quarter of 2012 to the first quarter of 2013, productivity increased 0.9 percent as output and hours worked increased 2.5 percent and 1.5 percent, respectively. (See table A.)

Hmmmm.

The problem here is that on an annualized basis non-farm productivity is up less than 1%.  This says that "innovation" has basically stalled -- and while there was a decent pickup this quarter, whether that's a trend change or whether it's simply a seasonal blip is difficult to determine.

The problem is that real (inflation-adjusted) hourly compensation is down -- 0.3% on the quarter, but 0.1% on the year as a whole.  Manufacturing did better, but that belies a problem -- service employees, which are most of the economy, are getting creamed.

No bueno my friends.

Well now what do we have here?

The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. "The PMI™ registered 50.7 percent, a decrease of 0.6 percentage point from March's reading of 51.3 percent, indicating expansion in manufacturing for the fifth consecutive month, but at the lowest rate of the year. The New Orders Index increased in April by 0.9 percentage point to 52.3 percent, and the Production Index increased by 1.3 percentage points to 53.5 percent. The Employment Index registered 50.2 percent, a decrease of 4 percentage points compared to March's reading of 54.2 percent. The Prices Index registered 50 percent, decreasing 4.5 percentage points from March, indicating that overall raw materials prices remained unchanged from last month.

Oops.

Employment is flat, prices are flat, and the PMI in general is barely positive.

New orders and production both increased .vs. last month, however.  Without those we would have had a negative (under 50) figure.

This is a bad report.  Of particular concern is the price figure that mirrors the regional Fed surveys showing that there is no pricing power, and employment has flat-lined.

The market didn't like this report and with good reason -- it sucks.

Let's see what service says.

I usually don't write on the Chicago PMI, but this one is worth a note:

The Chicago Purchasing Managers reported April's Chicago Business Barometer fell 3.4 to 49.0, a 3-1/2 year low.

Yep.

And if you look at the chart that's in there it looks damned familiar, doesn't it?

Uh huh.  It sure does. 

Now maybe it'll bounce like it did in the mid 90s, which was a short "pullback" (although for anyone in the middle of it in Chicago it sure felt like a recession -- it was a big part of what made some deals I did at the time possible!)

But it may also be the lead-in to the second half of 2008 too.

Of note employment went negative, which is not to be trivialized.

We shall see....

So what do we have here?

Personal income increased $30.9 billion, or 0.2 percent, and disposable personal income (DPI) increased $20.7 billion, or 0.2 percent, in March, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $21.0 billion, or 0.2 percent. In February, personal income increased $151.2 billion, or 1.1 percent, DPI increased $134.0 billion, or 1.1 percent, and PCE increased $81.6 billion, or 0.7 percent,  based on revised estimates.

So what's there to cheer about in this report?  Nothing.

Private wage and salary disbursements were up $14.9 billion, but that number was $44.6 billion in February.  Goods-producing payrolls contracted (barely), which isn't good at all.  Service payrolls were up half of last months figure.

Proprietors didn't do any better, basically cut in half from last month's increase.  Rental income was up about the same amount but interest and dividend income went negative compared to last month's healthy increase.  On the other hand, February was a bounce resulting from the pull-forward in December, so exactly how much of that is the "bounce along" effect is at this point difficult to determine.

Tax payments for social insurance (a good indirect measure of employment) however, increased at about 1/3rd of last month's value.  Not so good.

The "savings" rate was unchanged from last month at 2.7%.  Remember that paying down debt, in the government statistical view, is "saving."

Prices were flat; energy was down a bit, core was up a bit.  Net-net the change was about -0.1% and core was under +0.1%.  Call it a push.

There's nothing in here that impresses me in either direction with one exception -- this data supports the March payroll report and the trends since do not portend a meaningful improvement in April.

We'll see at the end of the week.