Today saw the release of a few more economic indicators, none of them particularly impressive in either direction, and one rather odd. Let’s start with the most optimistic of the bunch, which will give readers an indication of what’s to come. Monthly retail sales grew at an anemic 0.1% pace in June, but excluding autos, the results were flat:
The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for June, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $387.8 billion, an increase of 0.1 percent (±0.5%)* from the previous month, and 8.1 percent (±0.7%) above June 2010. Total sales for the April through June 2011 period were up 7.7 percent (±0.5%) from the same period a year ago. The April to May 2011 percent change was revised from -0.2 percent (±0.5%)* to -0.1 percent (±0.2%)*.
So sales were up in 2011Q2 over 2010Q2, but hardly moved from 2011Q1. Gasoline station sales accounted for a big part of the upward movement, rising 23.6% from last June, but down since May by 1.3%, making them the biggest loser of the month. The biggest month-on-month gains were made by building and garden supply dealers (1.3%). Furniture stores and sporting goods/books/music/hobby stores lost 0.8% and 0.7%, respectively. These are not numbers that indicate a consumer-driven recovery is on the horizon.
Later in the morning, the Census Bureau reported on manufacturing sales and inventories in May, and the news got worse:
Sales. The U.S. Census Bureau announced today that the combined value of distributive trade sales and manufacturers’ shipments for May, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,184.2 billion, down 0.1 percent (±0.1%)* from April 2011 and up 11.6 percent (±0.4%) from May 2010.
Inventories. Manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $1,514.0 billion, up 1.0 percent (±0.1%) from April 2011 and up 11.6 percent (±0.4%) from May 2010.
Separately, falling sales and rising inventories are bad signs for the economy. Put together, they indicate that future orders will be depressed from lack of demand, which will curtail hiring in the manufacturing sector. Given that end sales didn’t do so well in the following month, we have every reason to believe that the June report in four weeks will not show much improvement — except perhaps that inventories might expand less due to lower sales.
Finally, we have today’s weekly initial jobless claims report that showed a small but significant drop to 405,000:
In the week ending July 9, the advance figure for seasonally adjusted initial claims was 405,000, a decrease of 22,000 from the previous week’s revised figure of 427,000. The 4-week moving average was 423,250, a decrease of 3,750 from the previous week’s revised average of 427,000.
The advance seasonally adjusted insured unemployment rate was 3.0 percent for the week ending July 2, unchanged from the prior week’s revised rate of 3.0 percent.
The advance number for seasonally adjusted insured unemployment during the week ending July 2 was 3,727,000, an increase of 15,000 from the preceding week’s revised level of 3,712,000. The 4-week moving average was 3,719,250, a increase of 6,250 from the preceding week’s revised average of 3,713,000.
Reuters seemed mildly cheered by the news, as the figure beat industry estimates:
The number of Americans claiming initial unemployment benefits dropped last week but remained elevated and retail sales barely rose in June, suggesting the economy will struggle to regain speed in the second half. …
A separate report from the Labor Department showed initial claims for state unemployment benefits fell 22,000 to 405,000 last week. New claims were the lowest since mid-April.
While the reading was better than economists’ expectations for 415,000, claims remain above the 400,000 mark, which is usually associated with a stable labor market.
Ugh — Reuters is peddling the 400K myth again, but rather than rehash it, just click the link. Instead, let’s take a look at what happened to the numbers from last week’s report, courtesy of Zero Hedge:
This number is probably totally bogus due to next week’s imminent revision much higher: last week’s number was revised from 418K to a whopping 427K[.]
Don’t forget that we had a holiday last week (Independence Day), which usually produces an artificial trough in the claims level. We’ll almost certainly see an upward revision next week. What I wonder is why last week’s numbers jumped up so significantly. At any rate, this week’s number isn’t inconsistent with the data from the last three months, which put the range more or less in the 420K level.
None of these reports are surprising or dramatic, but they all point to one prediction: more stagnation.