Are consumers warming to spring spending tasks?

Few important economic reports are due this week and we’ll have to wait until Friday to see them, but we should pay close attention to retail sales data for April and the University of Michigan’s preliminary Consumer Sentiment Index for May.

Few important economic reports are due this week and we’ll have to wait until Friday to see them, but we should pay close attention to retail sales data for April and the University of Michigan’s preliminary Consumer Sentiment Index for May.

Together they’ll tell us a lot about how willing people likely will be to spend at a time of year when warming weather, holidays such as the just-passed Mother’s Day and the upcoming Father’s Day and myriad graduations send people into stores and put them in a spending mood.

Bloomberg reports that retail sales probably improved from a weak first quarter (economists’ consensus forecast is for growth of 1 percent in April after a 0.3 percent decline in March) and that the University of Michigan’s index probably rose a bit from what was a seven-month low at the end of April.

As stock investors, Americans have become restrained in their near-term outlook. Last week the Dow Jones industrial average lost 0.2 percent, the S&P 500 declined 0.4 percent and the Nasdaq composite index dropped 0.8 percent.

All three major indexes gained on Friday, though, even after the Labor Department’s jobs report for April seemed disappointing — 160,000 new positions, significantly fewer than the 205,000 that economists the Wall Street Journal surveyed were expecting. Job creation was the slowest since September.

Here’s an important reason for the market’s Friday upturn. The Journal noted that a 2.5 percent increase in wages from a year earlier in the Labor Department’s report and an increase in the average workweek for private-sector workers encouraged stock buyers.

“We’re still growing, and no economy can create jobs at greater than 200,000 a month forever,” Wayne Lin, a portfolio manager at QS Investors, told the Wall Street Journal.

"Employment was never going to continue rising at more than 200,000 a month indefinitely. Those monthly gains are simply unsustainable," Paul Ashworth, chief U.S. economist for consulting firm Capital Economics, echoed in a Reuters report that suggested the Labor Department data were pretty much what the Federal Reserve was expecting.

Some observers reacted to the jobs report by suggesting there is little chance now that the Fed will raise interest rates twice this year, as the central bank in March implied was likely.

Reuters noted in its report, though, that New York Fed president William Dudley told the New York Times two rate hikes this year remain “a reasonable expectation.”

The April jobs report was “a touch softer, maybe, than what people were expecting, but I wouldn't put a lot of weight on it in terms of how it would affect my economic outlook," Dudley said.

One separate but heartening statistic from last week was that the Fed said consumer credit rose by a seasonally adjusted $29.67 billion in March from the prior month. That was the fastest pace in more than a decade.

Economists the Wall Street Journal surveyed had expected a $16.5 billion increase.

Matt Freeman, credit-card products manager at the Navy Federal Credit Union, told the Journal that consumers boosted their revolving credit in March after paying down credit-card balances from holiday spending.

“After taking a spending break following the holiday season and as we move towards warmer weather and spring-break traveling, I would expect that revolving credit for the next two months will continue to increase,” Freeman said.

“The fact that it is the largest shift since 2000 may indicate more consumers are feeling comfortable revolving credit,” he added.

A harbinger? Perhaps — this week’s reports will tell us more.


MRAA Board Contributes to BoatPAC

Every board member contributed to the non-partisan political action committee, which works with congressional members who recognize the importance of boating.

Educator Training Conference Agenda Announced

The ABYC Foundation’s virtual conference is scheduled for July 20-22, with speakers covering a host of topics around creating the future workforce.

RIMTA Awarded $30K Grant

The financial support will go toward its fiberglass boat recycling pilot project.

Sandy Hook Yacht Sales adds Intrepid

The dealership and brokerage firm has six locations in New Jersey and Florida.

Everglades Expands Executive Team

The Edgewater, Fla.-based manufacturer adds positions in finance, sales and marketing and operations.

Heed Caution While Refueling

Ethanol can be back in a big way, and insufficent labeling at the pumps could lead to problems for your marine powerplant. And the MRAA’s voices support for the 30 by 30 initaitive.

Training the Next Generation

Crest Pontoons will donate a complete boat and trailer to a local high school’s raffle to raise money for its vocational programs.

An “Above Average” Hurricane Season

BoatUS wants to help boaters get ready for the 2021 Atlantic hurricane season, which begins June 1.