Lots of economic data out today. In no particular order here it is, with appropriate links.
- First time unemployment claims eased slightly for the week ending February 7 but the four-week average, the more accurate number, was up 24,000 to 607,500. MarketWatch.
- Retail sales rose by 1% in January, surprising everyone. For December they were down 3% and 2.4% in November, both revised numbers. More later on this statistic. MarketWatch.
- The NAR reported that prices of existing home sales dropped 12.4% in the fourth quarter. Total existing home sales on a seasonally adjusted basis were 4.7 million in the fourth quarter, down from 5.02 million units in the third quarter and down 5.9% from 5.0 million in the fourth quarter of 2007. Go to Reuters for many more details.
- Foreclosures in January fell 10% from December but were up 18% over January 2007 numbers. This is becoming a meaningless statistic as the various moratorium programs are impacting foreclosure activity mightily. MarketWatch.
- Industrial output in the Eurozone dropped 2.6% in December and 12% on annualized basis. The economies of the EU are starting to go into free fall. MarketWatch.
The Wall Street Journal Real Time Economics blog has some economists' reactions to the surprising retail sales numbers. Most downplay it as the result of statistical anomalies, though one makes an interesting observation.
Regardless of the reason sales increased, the improvement should help remind folks that things do not fall forever. Retail sales and the economy will eventually recover. This figure, however, does not mark the start of that recovery… January is one of the least important months for retailers, accounting for only a small portion of annual sales. This past month’s increase actually means that sales did not fall as much from December to January as they usually do, resulting in a seasonally-adjusted increase. The reason they did not fall as much as they usually do is that sales fell for six months in a row leading up to January, so they were already depressed. –Mark Vitner, Wachovia Economics Group
The idea that things bottom out sooner or later shouldn’t be ignored. In fact, as I wrote in a post a couple of days ago, the depth and speed of the contraction in the fourth quarter may lead to a snap back not unlike what we saw in the 1980 recession. It was characterized by a similarly sharp reduction in consumption and a very quick rebound. Of course, it also was followed by the very nasty 1982 recession. There are a lot of differences now, but there are some similarities.
Just trying to let a little sunshine in.