Last Week’s Economic News In Review
|Retail sales enjoyed solid gains, while lay-offs plummeted and wholesale inventories notched down.
Retail and food services sales rallied in January growing 0.2 percent to hit $449.9 billion, the Census Bureau reported last week. Compared to last year, this was 3.4 percent higher than January 2015.
Non-store retailers were a key driver for last month’s retail performance, growing 1.6 percent. Other notable performers were miscellaneous retailers, which were up 1.2 percent; general merchandise and grocery stores, which both grew 0.8 percent; and vehicle and parts dealers and home and garden stores, which both increased 0.6 percent.
Meanwhile, gas stations saw a 3.1 percent drop in sales, and that could be the key to January’s retail percent. With gas prices so low, consumers might have been willing to spend elsewhere.
“Consumers are now beginning to believe that these gas prices could stay low for longer, which would suggest that they may feel better about spending some of those savings,” Visa Inc. CFO Vasant Prabhu told the Wall Street Journal.
While retail sales were up for January, wholesale inventories dipped to $582 billion in December, down 0.1 percent from November’s level, according to the Census Bureau. That said, compared annually, December’s level was up 1.9 percent over December 2014 level.
While down, December’s performance was not as bad November’s wholesale inventories, which dropped 0.4 percent. Wholesale inventories typically indicate future retail performance, but January’s aforementioned solid retail sales showing seems to have bucked that trend.
Notable categories for December inventories were durable goods, which were down 0.3 percent; metals and minerals, except petroleum, which fell 4.4 percent; inventories of petroleum and petroleum products, which were down 7.8 percent; and nondurable goods, which notched up 0.1 percent.
Sales for wholesalers fell to $440 billion, a decline of 0.3 percent from November. This put the inventories to sales ratio for the month at 1.32.
Initial Jobless Claims
Lay-offs enjoyed a considerable drop during the week ending February 6, according to last week’s report from the Employment and Training Administration. First-time claims for unemployment benefits filed by the newly unemployed dropped to 269,000, a free fall of 16,000 claims from the prior week’s total of 285,000.
The four-week moving average — considered a more stable measure of jobless claims — fell to 281,250, a decline of 3,500 claims from the preceding week’s average of 284,750.
After weeks of hovering at 40-year lows, jobless claims had been creeping up to the 300,000-claim mark that economists consider the demarcation between a growing job market and a stagnant one. The rebound allayed fears that the job market’s recovery might have been flagging.
“Notwithstanding the meltdown in financial markets, the labor market remains just fine for the moment,” Amherst Pierpont Securities Chief Economist Stephen Stanley told MarketWatch.
This week we can expect:
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