Friday, October 16, 2009

Weekly Indicators

The economic data this week favored the bulls. Retail sales, industrial production, capacity utilization, and jobless claims were all to the good side. In particular, industrial production is up about 2.5% in the last three months, close to the point at which historically jobs have started to increase. Real retail sales gave back September's cash-for-clunkers advance, though, and are only up about 1% from their April bottom at this point. Consumer sentiment was down from a month ago, but well within the range of noise. CPI showed mild monthly inflation, and will probably probably rise into year-over-year inflation no later than next month.

Additionally, I've been tracking indicators that come out each week, particularly with respect to what they might mean for the creation of jobs.

The ICSC reported Tuesday that same store sales for last week were up 0.6% from last week, and up 1.0% from a year ago.

Meanwhile, Shoppertrak reported that as to mall traffic, "On a weekly level, ... sales for the week ending October 10th were down -3.o percent as compared to last year, while weekly sales decreased -0.7 percent versus the previous seven-day period ending October 3rd."

Initial Jobless Claims fell to 514,000 from a revised 524,000 a week ago. The 4 week average fell to 531,500. Claims are just slightly above the level where, if maintained for several months, I believe that jobs will actually start to be added to the economy.

Railfax reported that rail traffic is up from the previous week, and slightly improved (but still negative) on a year-over-year basis.

All things considered, a good week in the data.

From Bonddad:

I was especially pleased with this week's data. Industrial production was an indicator that gave me great concern for some time. While we are not out of the woods yet, we have seen some good improvement in this figure. For me, the continuing drop in initial jobless claims is very good news. While the number is still high (it is still a bit over 500,000) it has been continually coming down since the earlier part of this year. Retail sales ex-autos were up, indicating the C4C program helped but was not all that was going on there. The consumer sentiment numbers are concerning. However, despite the drop we still had an increase in retail sales which is positive. Additionally, the continued drop in initial unemployment claims indicates we should see a better jobs number in the next report which should help to boost this number going forward.
Quick update by NDD: There is one important negative I meant to include, and that is the price of Oil which closed at about $78 today. Above $80 for any length of time will start to drag the economy -- not just of the US, but the global economy -- back down, with another crash in demand. I cannot imagine what the geniuses trading Oil must be thinking.