US Retail Sales: Second-Largest Rise on Record

retail sales

Covid-19 vaccinations are having a direct, positive effect on the U.S. economy. The latest economic numbers, including a jump in retail sales, tell the tale.

Easing coronavirus lockdowns – tied to the rapid rollout of Covid-19 vaccinations in most states – helped spark a sharp increase in Americans’ spending . . . and the lowest new jobless claims since the start of the pandemic.

U.S.  retail sales in March rose by the most in 10 months. Retail sales grew a seasonally adjusted 9.8% in March compared with the previous month. That is stronger than the 5.9% increase in retail sales that economists expected. The spending was bolstered by the newest round of federal stimulus cash.

The jump in retail sales last month was the second-biggest rise on record. It trailed only the 18.3% increase in May 2020.

The U.S. employment picture also got brighter. The number of Americans filing for new unemployment benefits fell by 193,000 to 576,000 in the week ending April 10. That beat economists’ expectations for 700,000 new claims.

Manufacturing data added to the upbeat picture. The Federal Reserve’s industrial production report showed factory output grew by the most in eight months. Two regional manufacturing surveys – from the New York and Philadelphia Fed – also topped expectations. The latter hit its highest level since 1973.

I expect the U.S. economy to show double-digit GDP in both the first and second quarters, largely thanks to vaccinations allowing the economy to reopen.

The U.S. has administered almost 195 million doses of Covid-19 vaccines. It has fully inoculated 30% of the adult population and 63% of seniors. This is according to CDC data.

The Big News

CureVac Hopes to Win FDA Vaccine Approval by June

Germany’s CureVac (CVAC) says it is hoping to win regulatory approval for its Covid-19 vaccine in May or June. It will aim to produce up to 300 million doses this year and 1 billion in 2022. Like Moderna and BioNTech/Pfizer partnership, CureVac’s shot uses mRNA technology. CureVac’s shot could have several advantages over rivals. It can be refrigerated for three months. And it does not require the sub-zero storage needed for other mRNA vaccines. It also requires the smallest amount of active ingredient of any of the mRNA vaccines: 12 micrograms per dose.

Moderna Vaccine Booster Shot Ready by Fall

Moderna hopes to have a booster shot for its vaccine available in the fall. That was the message CEO Stephane Bancel relayed on CNBC Thursday. Last month, the National Institutes of Health (NIH) began testing a variety of offerings from Moderna to use as a third shot designed to boost immunity protection against variants, especially the South African variant, known as the B.1.351 variant.

Moderna Vaccine Output Rise Coming Soon

The pace of Moderna’s Covid-19 vaccine production is unlikely to speed up markedly in the next few months. But the company expects output to have increased significantly by 2022. The U.S. government has urged Moderna to speed production and delivery schedules after it temporarily halted the shipment of the Johnson & Johnson vaccine. “Adding big chunks of capacity takes time,” CEO Stephane Bancel said during a Wednesday investor call.

Inhaled Steroid Found to Aid Covid Patients

A widely available asthma drug was found to reduce the recovery time for Covid-19 patients treated at home by an average of three days. This is according to a large clinical study in the UK led by Oxford university. The interim results for the inhaled steroid, known as budesonide, provide the first statistically powerful evidence for a drug speeding recovery in people who are not hospitalized, said Professor Chris Butler, joint chief investigator on the trial.

Novartis Aids in Covid Drug Manufacture

Novartis signed a deal to make ingredients for Roche’s Actemra rheumatoid arthritis treatment that is being repurposed for Covid-19. The arrangement is the third such transaction signed by Novartis. It also signed agreements with BioNTech and CureVac to make therapies to help fight the pandemic. Novartis will make the active pharmaceutical ingredients for the Roche drug at its Singapore site. It will receive the necessary technology and expertise during the second quarter of this year.

The Coronavirus Numbers

Here are the numbers from Friday at 8 a.m. ET from Johns Hopkins University:

  • 139,181,513 Infected Worldwide
  • 843,964,265 Vaccines Given Globally
  • 2,988,452 Deaths
  • 31,496,435 Infected in the U.S.
  • 198,317,040 U.S.  Vaccine Doses Administered
  • 565,293 Deaths in the U.S.

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What’s Next

The Stoxx 600 index (Europe’s regional benchmark), rose 0.6% to a record high. Even the laggard UK market hit the 7000 level for the first time since February 2020.

Futures markets signaled that the S&P 500 – which rose more than 1% Thursday to a new record – would rise a bit this morning.

U.S.  government bonds steadied after a big rally in the previous session. The yield on the benchmark 10-year Treasury bond was flat at 1.583%.

The reason for the records is the economic recovery in the world’s two largest economies – the U.S.  and China.

China’s GDP soared 18.3% year on year in the first three months. That was the fastest rate since records began in the early 1990s. The high rate was anticipated – in the same period last year China’s GDP fell 6.8%. That was the first fall in over 40 years.

The U.S.  economy is also expected to show a double-digit GDP growth rate in the first half of 2021.

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Yours in Health & Wealth,

Tony Daltorio

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