This past week was light on monthly data. Retail sales surprisingly declined in December, but that decline was overmatched by revised increases in November. Industrial Production, Capacity Utilization, and the CPI all increased as expected. Consumer sentiment for the first part of the month was decent, and the Empire State Fed increased considerably more than expected for January. Parenthetically, the strong retail sales for November followed by relatively weak for December seem to correlate well with the surprise revision to positive job growth in November followed by a surprise weak (initial, unrevised) decline in December).
This month and next month are when the "rubber meets the road" for YoY comparisons. One year ago, consumers came back from the grave and started to spend a little again, rebounding from December 2008. This was my first clue that the economy's cliff-diving might be nearing a bottom. As of December 2009, we had 2.5% more real retail spending than a year before. Can the consumer continue the slow rebound?
Shoppertrak did not report for the week of January 9, but the ICSC reported same store sales for the week ending January 9 down -3.0% WoW (not a surprise given the end of the holiday season) and up 1.7% YoY. This is not as decent as it seems, since inflation is up 2.7% YoY.
Railfax reported that cyclical, intermodal, and total rail traffic were all higher than a year ago. Cyclical traffic, despite being at its seasonal low, was already at level equal to highest in the first half of last year, a good sign.
The BLS reported 444,000 new jobless claims for the prior week, up 10,000, but the 4 week average declined to 440.000, continuing the good trend. Since the BLS may have overdone the seasonal adjustment, I expect these numbers to increase in the next few weeks to the range of 480,000, but I do not think the longer downward trend since last April will be disturbed at all.
Gasoline sold for $2.75/gallon, breaking out higher from recent range. Gasoline use is in seasonal decline, but barely higher than last year. Oil ended the week at $78 a barrel. This bears watching carefully, as this is the most likel driver for any "double-dip" back into recession as the year progresses.
The daily treasury statement for January 14 showed $68.9B in payroll taxes paid so far this month vs. $75.0B last year, an -8% decline. Since these payments show a lot of seasonal variance, I continue to think that last October was the actual bottom in withholding tax payments.
The consumer will begin to show their hand for 2010 in the next few weeks.
While I don't have any doggies for you, since it is the end of the week, let me share with you a few photos of one of my favorite winter/spring vacation destinations, Charleston, South Carolina:
This is the east battery along the Cooper River:
and these are two photos of the south battery, around the corner and facing the harbor:
If you've never visited, you really ought to set aside a few days for a trip.
Finally, on a personal note, in my offline life I am totally swamped, so my blogging, which I already cut back in the last few months, will suffer some more until I dig out. - Peace, NDD.
