There were some good and some bad signs out this week.
Housing starts and permits were generally flat, but existing home sales increased. Inventory fell to 3.63 million, and months of supply decreased to 7.8 months. This is more evidence that the bottom in the housing market in terms of sales, but not prices, is in. Additionally, the September Leading Economic Indicators continued to point toward future strength.
Initial jobless claims rose by 11,000 to 531,000 last week, from a revised 520,000 a week previously; however, the four-week moving average of initial claims fell to 532,250 last week from 533,000.
ShopperTrak reported sales for the week ending October 17th were down -0.9 percent as compared to last year, while weekly sales increased 7.5 percent versus the previous seven-day period ending October 10th. This is the best YoY comparison for mall retail sales in quite a while, although it has still not turned positive.
On the other hand, the ICSC's same store sales report showed continued improvement, as shown in this chart of the last 5 weeks:
WEEK INDEX YoY% WK/wk%
Oct 17 490.3 2.8 0.2
Oct 10 489.4 1.0 0.6
Oct 3 486.5 1.0 0.3
Sep 26 485.0 0.9 0.1
Sep 19 484.6 0.6 -2.0
The continued weekly and Year-over-year improving comparisons are definitely bullish.
As for projected holiday sales, ShopperTrak predicted Tuesday that total holiday sales will rise 1.6 percent compared with a year ago, while the National Retail Federation predicted a 1.5% decline.
Rail traffic generally neither increased nor decreased on a seasonally adjusted basis in the week ending October 17. Weekly numbers should decline from now through early January for cyclical reasons. On a 4 week and 13 week average basis, rail traffic is holding steady to improving slowly. YoY comparisons in most areas, especially intermodal and cyclical traffic, are improving dramatically – but these YoY comparisons are very, very lagging.
Ominously, however, the Price of Oil moved above $80 and stayed there for most of the week.
My take: the improvement in actual retail sales bodes well as a data point for the jobs picture soon. Oil over $80 bodes ill for continued improvement, however, unless it is temporary.