Friday Economic Snapshot: Positive news for retail
You wouldn’t really guess it by looking at this week’s largely flat stock market performance — hurt by worries of Japan entering a bear market and the World Bank issuing a gloomy warning based on uncertainty over US monetary policy — yet this has been a largely solid week based on the latest economic indicators.
Like always, though, the results were mixed: American home foreclosures jumped on higher residential prices, growth forecasts for China have been slashed and Japan’s stock market fell more than 6 percent in one day. However, things were looking rosy at the tail end of this second full week of June, 2013 as the stock market reacted favorably to positive U.S. unemployment claims and positive retail sales data.
Aside from those rare, awful sky-is-falling weeks, there’s usually some good and bad economic news to be digested at the same time, but things are looking pretty good at the moment.
It’s not significant enough to move the dial much, but seasonally adjusted initial unemployment claims were 346,000 for the week ending June 1. This is a decrease of 11,000 from the previous week’s revised figure of 357,000. The four-week moving average was 352,500, an increase of 4,500 from the previous week’s revised average of 348,000.
No major change here from the last few weeks, as these are not slump-busting numbers, but Wall Street was happy so maybe we all should be, too. As long as the upward trend continues, the American economy continues to look strong in the face of continued uncertainty hanging over many parts of the globe.
Always terrific news for our service-based economy, the U.S. Census Bureau reported on Thursday that retail sales increased 0.6 percent from April to May. This includes retail and food service sales, and is adjusted for seasonal variation, holidays and trading-day differences.
The official numbers were $421.1 billion, which is also 4.3 percent above May 2012. Bright spots included the automotive industry, furniture and home furnishings, building materials, clothing and sporting goods.
It looks like these oft-touted green shoots are starting to take off in the late-spring sunshine.
Keeping the week’s positive momentum going, Freddie Mac released the results of its Primary Mortgage Market Survey, which showed fixed mortgage rates climbed higher amid the solid employment numbers for May.
Since beginning this climb last month, the 30-year fixed-rate mortgage has increased more than half a percentage point — moving us away from all-time record lows, which is helping to keep homebuyer affordability high.
While none of these numbers are drastically higher, the American economy is seeing improvement in some very promising places, specifically in retain, auto and home-related categories. This should produce spinoff benefits that should help lift other categories, as well as hopefully starting to take a bigger chunk out of the unemployment rate.