Economic Snapshot: Mild progress going into summer
After nearly crossing the record-setting 17,000 mark, the stock market has slightly retreated after the World Bank cut its 2014 global growth estimate to 2.8 percent from the previously expected 3.2 percent. Two big reasons? Trouble in Ukraine and, you guessed it, the impact of last winter’s harsh brutality.
Let’s see how things are progressing as we approach the first official days of summer.
An important metric for anybody in the business of selling, American retail sales increased 0.3 percent from April to May. Looking back to May 2013, sales increased 4.3 percent. This is increase falls slightly short of consensus expectations for a 0.5 percent gain.
While U.S. retail sales quickly began to recover starting in 2009, it appears the pace of that increase has started to pick up throughout 2014. A continued improvement in retail sales could provide a major lift to the overall economy.
It’s not the sexiest economic indicator, but the U.S. Treasury reported that the federal budget deficit in May 2014 fell to $130 billion, down from $138 billion in May 2013. More significantly, for fiscal year 2014 through May, the deficit was $436 billion, compared with $626 billion for the same period in 2013.
According to Bill McBride at Calculated Risk, this is the “fastest decline in the deficit since the demobilization following WWII.”
Meanwhile, unemployment claims for the week ending June 7 increased by 4,000 to 317,000. This puts the 4-week moving average at 315,250, an increase of 4750 from the previous week’s average.
Looking back to the early 2000s, the current level of unemployment claims is solidly in a post-recession level that’s as healthy as what we saw from 2005 through the middle of 2008 — a great sign for the coming month’s job creation figures.