Home > Consumer News, Housing Sector, Labor Market, US > Jobless Claims Unexpectedly Rise, Retail Sales Decline, & Foreclosures Are Up…

Jobless Claims Unexpectedly Rise, Retail Sales Decline, & Foreclosures Are Up…

August 13th, 2009 Michael McDonough

Initial jobless claims rose to 4K this week to 558K, compared to a previous revised reading of 554K and a Bloomberg consensus forecast of 543K.  This number has been trending to lower, which indicates a slowing improvement for the US labor market.  But, claims still remains far from healthy levels, and still indicates significant deterioration for the US payroll data.  I do not see this week’s increment as the beginning of a trend, but rather a one-off event on the bumpy road to recovery, however, it will be important to monitor next week’s result to confirm this.

Retail sales unexpectedly fell -0.1%, despite the success of the government’s ‘cash for clunkers program’.  The Bloomberg consensus was for an increase of +0.8%.  Retail Sales (Ex-autos) fell an even further -0.6% for the month. This weakness is likely derived from the fact that consumers are still scared to spend in light of sustained weakness in the labor market, despite the government’s stimulus package.  Based on this, it is unlikely we will see much, if any, improvement to retail sales over the coming months.  Furthermore, rising interest rates and energy prices will not help the situation.

Retail & food services, total -0.1% -8.3%
Total (ex-autos) -0.6% -8.5%
Retail Sales -0.1% -9.4%
Motor vehicle & parts dealers 2.4% -7.3%
Auto & other motor veh. Dealers 2.8% -8.0%
Furniture & home furnishings stores -0.9% -12.9%
Electronics & appliance stores -1.4% -14.6%
Building mat. & garden eq. & supplies dlrs. -2.1% -14.7%
Food & beverage stores -0.3% -0.8%
Grocery stores -0.3% -1.1%
Health & personal care stores 0.7% 4.1%
Gasoline stations -2.1% -32.5%
Clothing & clothing accessories stores 0.6% -7.6%
Sporting goods, hobby, book & music stores -1.9% -6.4%
General merchandise stores -0.8% -4.7%
Department stores (ex. L.D.) -1.6% -11.5%
Nonstore retailers 0.1% -5.2%
Food services & drinking places 0.4% 1.0%

Finally, foreclosures rose 7% in July versus June, realizing a32% year over year gain.  Foreclosures combined with weakness in the labor market will continue adversely impacting housing sector, preventing it from reaching its full potential despite recent improvements.  Regarding the issue the CEO of RealtyTrac, James Saccacio said,  “Despite continued efforts by the federal government and state governments to patch together a safety net for distressed homeowners, we’re seeing significant growth in both the initial notices of default and in the bank repossessions.”

Comments are closed.