Two-speed economy

Consumers are doing well, but industrial activity isn’t so hot.

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Two speed economy
Welcome to the Know the Difference Minute for Thursday, June 15th.
Retail sales in May rose a better than expected 0.3% from April. Yet, industrial production fell 0.2%.
What gives? Consumers are doing well, but industrial activity isn’t so hot.
Well, the labor market is strong, wages have been rising, and some people still have stimulus money available to prop up spending. Credit card debt has also been growing leaps and bounds. This could be the last gasp of people trying to make up for lost experiences during COVID.
Manufacturing spent much of 2022 in a recession and there are early signs of stability and maybe even growth. The challenge is that consumers look to be running out of steam. Consumption helped keep the economy out of a full-blown recession in 2022. Manufacturing and housing will have to do the heavy lifting in 2023 and that might be a big ask.
I’m Brian Jacobsen, Chief Economist at Annex Wealth Management. That is your Know the Difference Minute.