The Bank of England’s governor on Friday warned that Britain risked an economic recession if citizens voted to leave the European Union (EU) in next month’s referendum. “In that scenario we would expect a material slowing in growth, a notable rise in inflation, a challenging trade-off,” Mark Carney predicted at a news conference. Prudent advice from a sober-minded central banker? Or, as critics charge, a misguided effort to sway a democratic debate by pushing an institution that should remain above the fray into the political arena?
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Broadly defined commodities bounced higher last week, topping the performance list for the major asset classes, based on a set of proxy ETFs. iPath Bloomberg Commodity (DFP) increased 1.4% for the five trading days through May 13, delivering a relatively outsized gain vs. the rest of the field.
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● US Retail sales up 1.3% in Apr, biggest gain in a year | MarketWatch
● US Consumer Sentiment Index In May At 1yr High | Bloomberg
● US Business Inventories Rise More Than Expected In Mar | RTT
● GDPNow Q2 growth estimate for US jumps to +2.8% | Atlanta Fed
● NY Fed nowcast for US GDP growth in Q2: +1.2% | NY Fed
● China Ind Prod, Retail Sales Up Less Than Expected in Apr | RTT
● Yes, the IMF and 200-plus economists can be wrong | R. Bootle (Telegraph)

● Who Rules the World?
By Noam Chomsky
Summary via publisher (Metropolitan/Macmillan)
In an incisive, thorough analysis of the current international situation, Noam Chomsky argues that the United States, through its military-first policies and its unstinting devotion to maintaining a world-spanning empire, is both risking catastrophe and wrecking the global commons. Drawing on a wide range of examples, from the expanding drone assassination program to the threat of nuclear warfare, as well as the flashpoints of Iraq, Iran, Afghanistan, and Israel/Palestine, he offers unexpected and nuanced insights into the workings of imperial power on our increasingly chaotic planet.
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The Atlanta Fed this morning revised its GDP growth estimate for the second quarter up to 2.8%–a substantially stronger projection for economic output vs. the virtually flat 0.5% gain in Q1 (seasonally adjusted annual rate). The catalyst for today’s update: retail sales posted a strong rebound in April following a slump in March.
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Consumer spending revived in April after slumping in March, the US Census Bureau reports. Today’s update offers new support for arguing that economic growth will strengthen in the second quarter after virtually grinding to a halt in Q1, based on GDP data.
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The US stock market is looking wobbly again, but you wouldn’t know it by reviewing the trend in utility stocks. This interest-rate sensitive slice of equities continues to dominate the sector horse race, based on a set of proxy ETFs.
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● US jobless claims hit 14-mo high; analysts blame Verizon strike | Reuters
● US Consumer Comfort Index Drops to 5-mo Low on Econ Views | Bloomberg
● US import prices rise 0.3% for 2nd straight month | MarketWatch
● Bank of England: Brexit slowdown could lead to recession | Reuters
● Growth in Germany Accelerates on Higher Consumption | NY Times
● UN cuts global economic growth forecast for 2016 | Reuters
● Battling the invisible but real hyperinflation monster | Scott Sumner (Econolog)

US retail sales are expected to rebound in tomorrow’s April report vs. the previous month, according to The Capital Spectator’s average point forecast for several econometric estimates. The average prediction reflects a 0.6% increase vs. the previous month’s spending total.
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New filings for unemployment benefits in the US soared last week, delivering a sharp rebuke to the consensus forecast, which was looking for a modest decline. Instead, economists were blindsided as jobless claims surged 20,000 to a seasonally adjusted 294,000 for the week through May 7, the Labor Department reports. The government advises that no “special factors” influenced today’s release, which marks the biggest weekly rise for the seasonally adjusted data in two years. But the numbers could be skewed by a Verizon strike in New York state and so the bearish report may be less threatening than it appears on first glance.
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