FMN | May 25th, 2020

Manufacturing (Cont’d from Page 11)

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flationary pressures from the sharp drop in econom- ic activity due to COVID-19, and as such, it has pur- sued extraordinary monetary policy measures to help prop up the economy—providing a financial “bridge” for consumers and businesses until activity picks back up.These data support that notion, with prices pulling back sharply inApril in light of a severe global recession. Retail Sales : With Americans under stay-at-home orders nationwide, consumer spending plummeted 16.4% in April, the largest monthly decline since the series began in 1992 and extending the 8.3 percent de- crease seen in March.The extent of the decline in retail spending in April was extraordinary, with the largest declines in clothing and accessory stores (down 78.8 percent), electronics and appliances stores (down 60.6 percent), furniture and home furnishing stores (down 58.7 percent), sporting goods and hobby stores (down 38 percent), food services and drinking places (down 29.5 percent), department stores (down 28.9 percent) and gasoline stations (down 28.8 percent), among others. Motor vehicle and parts dealers said that sales were off 12.4 percent. Excluding motor vehicles and gasoline, retail sales were down 16.2 percent for the month. On a year- over-year basis, retail spending was down 21.6 per- cent, with a decline of 16 percent if automobiles and gasoline are excluded. Nonstore retailers were the only bright spot, with sales up 8.4 percent as Americans purchased more on- line.This exacerbated the consumer dynamics seen in recent years,with retail shifting from brick-and-mortar stores to online retailers. Along those lines, sales for nonstore retailers jumped 21.6 percent year-over-year, but department store sales fell sharply, down 47 per- cent over the past 12 months. To be fair, this decline was also exaggerated by the shutdowns, making it im- perative to watch what happens in the coming months as stores start reopening. University of Michigan Consumer Sentiment : After falling to the lowest level since December 2011, the Index of Consumer Sentiment edged up from 71.8 in April to 73.7 in May, according to pre- liminary data from the University of Michigan and Thomson Reuters.The underlying data were mixed. Americans were somewhat more upbeat in their view of the current economic environment, with that measure rising from 74.3 to 83.0. However, there was continued deterioration in the outlook for future economic conditions, down from 70.1 to 67.7. The release notes that financial conditions of respondents were the lowest in six years despite

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Flexo Market News May 25, 2020 13

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