Thursday, June 13, 2013

Retail sales a welcome positive surprise; good initial claims too

- by New Deal democrat

May retail sales posted a very unexpected +0.6% increase over April. Since CPI probably increased about +0.2% in May, this means that real retail sales increased ~+0.4%. The dark cloud in that silver lining is that presumably the savings rate fell to a new post-recession low, but we won't find that out for another couple of weeks.

Meanwhile initial claims decreased to 334,000. Once again this is within the range of a normal expansionary reading. Since the recent weekly high of 363,000 initial claims passed out of the 4 week average, that now declined to 345,250. This is still about 10,000 above what I would want to see in a normal expansionary environment.

While growth has still been not nearly good enough, it remains surprising just how resilient the economy has been.