Economic Notes:
 
Consumer Sentiment Survey +2.8
The University of Michigan consumer sentiment index rose 2.8 points to 67.9 in May's preliminary report, in line with expectations. The gain was driven by an improvement in economic expectations. This places the index at its highest point since September, a sign that consumers are becoming moderately less gloomy.
 
Treasury International Capital Flows +55.8B
TIC flows climbed again in March. Net foreign purchases of long-term securities rose to $55.8 billion, indicating a revival of foreign appetite for U.S. financial assets. Foreign investors are motivated by the desire for safe haven, as global financial markets are still in a fragile state. They increased their holdings of U.S. long-term securities; net purchases rose to $56.4 billion from $20.8 billion the prior month.
 
Industrial Production -0.5%
After many months of large declines, industrial production fell just 0.5% in April, and manufacturing output fell only 0.2%. The improvement reflects better fundamentals in manufacturing, specifically firmer consumer spending and smaller declines in exports, especially from Asia. Meanwhile, mining output fell sharply for a second straight month, while utility output rose modestly.
 
Productivity and Costs +0.8%
Nonfarm business productivity in the first quarter rose 0.8% at an annualized rate, and unit labor costs increased at a 3.3% pace. Hours worked fell more sharply than output during the quarter, leading to the gain in productivity. The increase in unit labor costs was stronger than expected and will weigh on corporate profits.
 
Consumer Price Index 0.0%
The top-line seasonally adjusted CPI stayed level in April, compared with a small monthly decrease of 0.1% in March. The top-line CPI is now down by 0.5% from April 2008. The core CPI increased by 0.3% in April and is up by 2% from one year ago. CPI inflation thus remains steady even though gasoline and energy prices don't seem to have bottomed out yet, while the core index shows no sign of deflation as of yet. On a monthly basis, core prices have pulled away from their nadir in December, when the core CPI stayed level, an unusual occurrence.
 
Consumer Credit  -$11.1 B
Consumer credit balances fell sharply in March. Total credit declined by $11.1 billion to $2.551 trillion. Both revolving and nonrevolving credit balances fell by similar amounts. An influx of cash has lessened the need for consumer to borrow, while lending standards are still tight.
 
Employment Index +2 pts
The Monster Employment Index rose 2 points between March and April to 120. On a month-ago basis, 14 of the 20 industries tracked by the index saw increases in job availability, although seasonal increases in job advertising likely played a role in driving the index higher. By comparison, on a year-ago basis, the index fell 31%. This is the steepest percentage decline on record, which suggests labor demand remains weak.
 
Mass Layoffs -17.5K
The number of announced job cuts eased in April to 132,509, from more than 150,000 in March. The tally has decreased in every month since January. However, the number of people affected by job cuts still remains elevated and was nearly 50% higher in April than a year ago.
 
Jobless Claims -34 K
Consumer credit balances fell sharply in March. Total credit declined by $11.1 billion to $2.551 trillion. Both revolving and nonrevolving credit balances fell by similar amounts. An influx of cash has lessened the need for consumer to borrow, while lending standards are still tight.
 
MBA Mortgage Applications Survey +2.0%
In the week ending May 1, the MBA market index improved, rising 2% to 979.7. Both the refinance and purchase indices showed modest gains. The purchase index ended at 264.3, a gain of 5% from the week before. Meanwhile, the refinance index increased 1.2% to finish at 5,169.3.
 
Internet Sales (E-Commerce Sales) +0.7%
Retail e-commerce sales rose slightly in the first quarter of 2009, advancing 0.7% q/q, compared with a decline of 6% (revised) in the fourth quarter of 2008. With the U.S. economy in recession, consumer spending, and even online purchases, has taken a hit. Sales, however, fell 5.4% from a year ago.
 
Chain Store Sales +0.7%
Chain store sales improved in April, with more retailers posting improved same-store sales growth. In aggregate, sales rose 0.7% for the month, according to the ICSC, following six months of declines. However, the gain was due to the shift in Easter; average growth over March and April remained negative. Further, sales fell 2.7% excluding Wal-Mart. Gasoline prices were also hurt, undermining sales at warehouse clubs. Luxury sales continued to tumble, as consumers remain intensely focused on necessities as the overall spending picture remains weak.
 
Oil and Gas Inventories +.6 mb
Crude oil inventories rose by 600,000 barrels during the week ending May 1, according to the Energy Information Administration, below expectations of a 2.5 million barrel build. Gasoline inventories fell by 200,000 barrels, falling well short of expectations of a 550,000 barrel build. Distillate inventories rose by 2.4 million barrels, above expectations of a 900,000 barrel build. Refinery operating capacity surged from 82.7% to 85.3%, surpassing expectations. Total domestic petroleum demand fell. This report will cause oil prices to fall.
 
Weekly Natural Gas Storage Report +95 B cf
Working gas in underground storage rose by 95 billion cubic feet during the week ending May 1. The consensus estimate was for an increase of 92 bcf.
 
Source: Economy.com