US - Food sector retail sales growth in May was at the slowest year-over-year pace since March 2014, according to data released by the US Census Bureau. CME analysts Steve Meyer and Len Steiner discuss foodservice, retail and economic data with a view to meat demand.
Food service and drinking place sales were up 4.3 per cent from a year earlier, compared to a 8.7 per cent gain in April.
Grocery store sales increased 0.7 per cent from year ago. In April, grocery store sales were up 1.8 per cent from twelve months earlier.
Grocery store sales during this year’s first quarter were up 2.9 per cent from the same quarter in 2015 and should be on track to be up 2.0 per cent for 2016 as a whole.
Last year, grocery store retail sales were up 2.9 per cent compared to 2014’s first quarter.
Food service and drinking place sales in the first quarter of this year was up 7.2 per cent year-over-year, but that was below a year earlier; the first quarter of 2015 was up 8.1 per cent from 2014’s.
Prospects for the rest of 2016 suggest food service and drinking place retail sales will range 4 per cent to 5 per cent higher than last year’s, good but not great.
Year-over-year the economy as a whole did not see as much of a slowdown in retail sales as was registered in the food sector.
Total retail sales in May were up 1.9 per cent from a year earlier. In April, total retail sales were up 2.9 per cent. Still, the May gain was bigger than those posted in four out of six months from August 2015 to January 2016.
For each for the last three reported months, the grocery store sales growth rate has declined.
Looking back, in May 2015, grocery store sales also were decelerating, as growth was down for five consecutive months beginning in December 2014. But, last year grocery store sales growth in June and July posted larger percentage gains.
Overall, prospects for food sector retail sales do not look problematic.
Aggregate wage and salary growth across the US economy was up 5.2 per cent during the first quarter of this year.
There have been some concerns about this component of the economy related to static labour market trends during the winter quarter, but monthly data on wages and salaries during May suggest that wages and salaries growth for this quarter will be in the 4 per cent to 5 per cent range.
Disposable income for the first quarter of 2016 was up 4.3 per cent from a year earlier and current quarter readings suggest about a 4 per cent gain.
Month-to-month gains in US payroll jobs were disappointing during April and May, falling short of the growth seen a year earlier.
Measures of weekly earnings have posted impressive gains, however. Average weekly earnings for production and supervisory employees increased by $12 from March to May. This compares to a $9 decline over the same period in 2015 and an $8 decline for the comparable period in 2014. This was the biggest March-May increase since 2011.
Labour market data could be reflecting increased risk aversion on the part of employers, with increasing demand for labour being met with more hours worked per week, as opposed to additional hiring.
During the March-May period, average work week length rose by close to half an hour. The most notable gains came in natural resources (probably energy industry) and non-durable goods manufacturing.
The hourly work weeks in private service-providing industries changed little. No industry registered a significant decline in the average hourly work week.
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