Jobs Improve, Retail Sales Still Weak

The jobs report was a little better, retail sales not so good.

Initial claims as reported by the NYT fell from 625,000 to 621,000 while the four-week moving average increased by 4,000 to 631,250. Continuing claims fell by 15,000 to 6.7 million. At least it isn’t getting worse.

Retail sales for May are shaping up to be pretty weak. Consumers aren’t parting willingly with what little money they do have.

From the WSJ Real Time Economics Blog, here’s a chart of those retailers that have reported sales (Sorry about the bad formatting but the info is still valid):

Company name	Category	Same-store sales change	Overall sales change	Overall sales (millions)	Comments
Abercrombie & Fitch	Apparel	-28%	-22%	$182.1	Year-to-date the company’s sales are down 23% compared to last year, as the retailer continues to struggle amid the economic downturn. Sales fell more than 25% across all brands.
Aeropostale	Apparel	19%	30%	$132.9	The company continues to buck the weakness in the retail sector, saying margins for the month increased over last year.
BJ’s	Discount	4%	-4.7%	$783.4	“Traffic continued strong, increasing by 5% over last year,” CEO Laura Sen said. Overall, May sales results reflected continued strength in food and consumables, televisions and computer equipment, partly offset by ongoing softness in discretionary departments such as apparel, jewelry and sporting goods, and a slightly increased impact from price deflation in certain areas of perishable foods.” (Same-store sales change excludes gasoline.)
Buckle	Apparel	13.4%	19.2%	$60.6	The teen-apparel retailer has now posted positive comparable store sales for 33 months in a row.
Costco	Discount	-1%	-5%	$5,470	Strongest results were seen in the Northeast and Midwest. Food and sundries continued to be the strongest categories, as discretionary categories post sales declines. Electronics, for example, posted increases in numbers of sales but price deflation pushes revenue lower from a year earlier. (Same-store sales change is for U.S. and excludes gasoline.)
Gap	Apparel	-6%	-5%	$1,030	The lower-cost Old Navy stores managed to eke out a 3% gain in sales from a year earlier. The flagship Gap stores and Banana Republic didn’t fare as well, seeing same-store sales drop 11% and 14%, respectively.
Hot Topic	Apparel	-6.4%	-2.9%	$46	The young-adult retailer’s year-to-date sales are 7.2% higher than a year earlier, has profited from selling gear connected to the teenage vampire movie “Twilight.” However, the earlier sales gains are turning into declines.
J.C. Penney	Department	-8.2%	-6.7%	$1,254	The company expects a June sales decline of 9%-12%. The top performing merchandise division in May was women’s, as fine jewelry experienced the weakest sales. Geographically, the best performing region of the country was the Southwest, while the Southeast region experienced the weakest results.
Limited Brands	Apparel	-7%	-6%	$618.7	The parent of Victoria’s Secret said sales at those stores dropped 10% in the month, despite Mother’s Day sales. Meanwhile, Bath & Body Works posted a 1% decrease. The company said margins were lower.
Macy’s	Department	-9.1%	-9.5%	$1,743	Despite a 9.5% year-to-date drop in total sales, performance is in line with the company’s low expectations. Web sales provided a small bright spot. Online sales (macys.com and bloomingdales.com combined) were up by 12.2% in May.
Neiman Marcus	Luxury	-23.3%	-21.5%	$246	The company continued to experience weakness across all regions and merchandise categories, especially at its Neiman Marcus and Bergdorf Goodman stores. Drops were less steep in its Neiman Marcus Direct business.
Nordstrom	Luxury	-13.1%	-8.7%	$653	The luxury retailer continues to suffer amid the economic downturn. The South, Mid-Atlantic and Midwest regions were the company’s best. Coats and dresses were the top merchandise categories.
Ross Stores	Apparel	4%	10%	$564	The discount apparel retailer continues to benefit from shoppers looking for bargains. Dresses and shoes were the best performing merchandise categories, and the company cited favorable weather effects for the month.
Saks	Luxury	-26.6%	-25.8%	$166.1	All merchandise categories posted a decline. The company said a sales boost from the shift of a clearance event into May from April last year was more than offset by the shift of a designer sale event into June this year from May last year.
Target	Department	-6.1%	-2.3%	$4,458	The company said sales were below expectations. Music, movies, books were the weakest categories, while home and apparel sales posted declines. The only strength was recorded in nondiscretionary categories, such as health care.
Zumiez	Apparel	-20.7%	-9.6%	$26.0	All departments posted a decline from a year earlier, as average transaction size also declined.

Comments

[dw57:]

how is a fall from 625000 to 621000 more than a statistical oddity? i think the retail sales is much more telling

Jun 04 04:54 PM

[billddrummer:]

I tend to agree with dw57. A gap downward of 50,000 would be statistically significant. A gap downward of 4,000 is statistical noise.

Jun 04 05:13 PM

[Tom Lindmark:]

Agree with both of you. It doesn't tell you anything except were wallowing around in a very bad job market.


On Jun 04 05:13 PM billddrummer wrote:

> I tend to agree with dw57. A gap downward of 50,000 would be statistically
> significant. A gap downward of 4,000 is statistical noise.

Jun 04 05:40 PM

[user344210:]

Couldn't the shrinkage in continuing claims just be people's ability to collect running out? In which case, it's worse because now those 15K people have zero money coming in, rather than at least having unemployment coming in.


On Jun 04 05:40 PM Tom Lindmark wrote:

> Agree with both of you. It doesn't tell you anything except were
> wallowing around in a very bad job market.

Jun 04 07:06 PM

[mac123449:]

Barack Obama after visiting Egypt would now like every citizen of America to refer to him as the God King all the umemployed are to gather as many stones as they can find and report to the local pyramid building site.

Jun 04 10:19 PM

[six:]

Right as rain... the lack of employment report is being spun HARD by the media. They know as well any of us that 4000 is nothing, not to mention the 4wk moving average going UP! This is all part of a manufacuted rally with no volume. Note that the retail sales report was never a headline or even a topline report on any major media website.
Be ready for the slide. This is the Gov padding the market so when commercial real estate and consumer credit defaults start the market will have some fat to shed. Understand that if commercial real estate goes through anything like residental has it will killl a large number of banks... big, medium and small banks.

Jun 04 11:32 PM

[Buy and Hol...:]

The pundits were also talking about the decline in continuing claims. Maybe this isn't the good news they were talking about. What if it is bad news, as in people exhausting their benefits. Consider a former GM or Chrysler worker in Detroit, who gets laid off. He'll get 33 weeks of unemployment benefits.

Think he'll find another job in 33 weeks?

How many other people are like this hypothetical auto worker?

Jun 05 12:05 AM

[Moon Kil Woong:]

First, the Dow should not be at 5000 if inflation is cropping up, what should happen is bonds falling flat on their face as people rush towards commodities and stock to hedge inflation which is happening now.

I agree that the unemployment number doesn't mean much and retail sales are weak as expected. I don't see it getting much better as inflation rears its ugly head. However, one can't fully blame Obama. The inflation steam train started back with Bush Jr. and the with Fed choosing monetary expansionsm including QE, Zirp, and TARP. Those alone are enough to make the dollar plunge in value. The effects of PPIP, a massive deficit, and Obama stimulus haven't even been fully factored into the inflation we are seeing now. Those are extra bonuses we will get later down the road with even higher inflation. Jimmy Carter here we come thanks to politicians (Republicans and Democrats) and the Fed (that quasi governmental entity charged with protecting the value of the dollar cough, snicker).

Jun 05 01:35 AM

[Donald Ingram:]

This so much bull reminds me of the Two farmers that shelter from an approaching tornado. Upon exiting the shelter and finding everything completely destroyed, the one starts to lament this fact, until interrupted by the other who says, "at least its not windy anymore!"
When things are bad - they are bad! Plain and simple.
All of this "not as bad as", "could be worse", "the least decline in", "some sales are flat" so this BIG decline of 4,000 when talking about 14 million means nothing!
The level of suffering coming to the United States is going to be shocking.

Jun 05 02:33 AM

[rick12345:]

Wow, a whole 4000. Any way you look at it, based on a total workforce of 154.7m the new jobless figure will be approximately 14.345m. This means the unemployment rate should equate to a figure of roughly 9.25 percent.

Jun 05 03:43 AM

[chleoku:]

I think other than offline retail figures, we need to also look at the online retail figures. I wonder how Amazon will do next week when they officially release Kindle DX:

www.wealthalchemist.co.../

Jun 05 06:35 AM

[White Shield:]

When the primary job-growth sector is "government", rather than private...and that is a solid trend, rather than a periodic anomaly, you are approaching a complete and catastrophic collapse. Most folks realize that revenue CANNOT come from government. Unfortunately, none of those who know this have been running government since Ronald Reagan. Tick-tock...

Jun 05 10:42 AM

[Vishlysr:]

Thanks for the useful insights into the current job scene. It is mid 2009 and it seems like the economy is slowly improving but the job safety is still an issue. By the way, there is a 9-minute survey that shows if one's job is safe or not. You can take the survey and view instant results! www.angstcorner.com/Ho...

Jun 24 01:29 PM