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The one bright spot....if you think 17+ % unemployment is bright...Retail sales fall unexpectedly; jobless claims up
Retail sales drop 0.3 pct in December, plunge for year; new jobless claims rise
By Martin Crutsinger and Christopher S. Rugaber, AP Economics Writers , On Thursday January 14, 2010, 3:50 pm EST
WASHINGTON (AP) -- Retail sales unexpectedly fell in December, leaving 2009 with the biggest yearly drop on record and highlighting the formidable hurdles facing the economy as it struggles to recover from the deepest recession in seven decades.
In another disappointing economic report, the number of newly laid-off workers requesting unemployment benefits rose more than expected last week as jobs remain scarce.
Still, many economists, puzzled by the retail sales decline that follows reports from retailers of brighter holidays, cautioned that the December figures don't necessarily signal a big consumer pullback and could be a blip.
In the jobs report, the Labor Department said new claims for unemployment insurance rose by 11,000 to a seasonally adjusted 444,000. Wall Street economists polled by Thomson Reuters expected an increase of only 3,000.
The rise was partly a result of large seasonal layoffs in the retail, manufacturing and construction industries, a Labor Department analyst said. The second week of January usually sees the largest increase in claims, unadjusted for seasonal trends, during the year, the analyst said.
Let's hope that trend continues.Still, the increase didn't disrupt the longer-term downward trend in claims. The four-week average dropped to 440,750, its 19th straight drop and lowest level since August 2008.
Jan 14, 12:29 AM (ET)
By ADRIAN SAINZ
MIAMI (AP) - A record 2.8 million households were threatened with foreclosure last year, and that number is expected to rise this year as more unemployed and cash-strapped homeowners fall behind on their mortgages.
The number of households that received a foreclosure-related notice rose 21 percent from 2008, RealtyTrac Inc. reported Thursday. One in 45 homes were sent a filing, which includes default notices, scheduled foreclosure auctions and bank repossessions.
In December, more than 349,000 households, or one in 366 homes, were hit with a foreclosure-related notice. That represents a 14 percent spike from November and a 15 percent jump from December 2008
y Martin Crutsinger, AP Economics Writer , On Thursday January 14, 2010, 9:00 am EST
WASHINGTON (AP) -- Retail sales fell in December as demand for autos, clothing and appliances all slipped, a disappointing finish to a year in which sales had the largest drop on record.
The weakness in consumer demand highlighted the formidable hurdles facing the economy as it struggles to recover from the deepest recession in seven decades.
The Commerce Department said Thursday that retail sales declined 0.3 percent in December compared with November, much weaker than the 0.5 percent rise that economists had been expecting. Excluding autos, sales dropped by 0.2 percent, also weaker than the 0.3 percent rise analyst had forecast.
For the year, sales fell 6.2 percent, the biggest decline on records that go back to 1992. The only other year that annual sales fell was in 2008, when they slipped by 0.5 percent.
The 0.3 percent decline in December was the first setback since September, when sales had fallen 2 percent. Sales posted strong gains of 1.2 percent in October and 1.8 percent in November, raising hopes that the consumer is starting to mount a comeback.
Consumer spending is considered critical to any sustained economic revival since consumer spending accounts for 70 percent of total economic activity.
The December drop in sales was a surprise given that the nation's big retailers had reported better-than-expected results last week, reflecting a surge of last-minute holiday shopping. But even with the rebound reported by the nation's biggest chains, these retailers suffered their worst annual performance in more than four decades in 2008, according to data from the International Council of Shopping Centers.
The 6.2 percent fall in the government's retail sales figure is only the second decline on records that go back to 1992. In all other years, even during previous recessions, retail sales, which are not adjusted for inflation, have managed to increase
Feb. 1 (Bloomberg) -- Evidence of a self-sustaining U.S. recovery is emerging on the factory floors of Texas Instruments Inc. The second-largest U.S. chipmaker will spend almost $1 billion this year to expand three factories and open a fourth to fill orders.
The need to rebuild industrial capacity after the largest decline on record in 2009 is boosting capital spending and may spur hiring. Beneficiaries are led by technology equipment- makers Intel Corp., Applied Materials Inc. and EMC Corp., as well as industrial product providers General Electric Co. and Rockwell Automation Inc.
Capital spending will increase the total productive capacity of the U.S. economy above its pre-recession level of December 2007, helping gross domestic product grow at a 2.7 percent annual rate in 2010, according to the median forecast of 67 economists in a Jan. 14 Bloomberg News survey. That would be the fastest rate since 2006.
“Our business is growing so we have to build out capacity,” Dave Pahl, Texas Instruments’ director of investor relations, said from Dallas. “Our customers are increasing what they’re building, so that’s increasing our revenue.”
Business executives say spending will increase further as profits rise -- third-quarter earnings increased 10.8 percent, according to Commerce Department figures, the most in more than five years -- and demand strengthens. Of U.S. companies followed by Morgan Stanley analysts in New York, 38 percent intend to raise capital spending over the next three months, up from a low of 3 percent in August.
‘Very Powerful Recovery’
“The groundwork has been laid for a very powerful recovery in capital spending,” said Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities in New York. “It won’t take much of a spark to get companies to start spending and hiring.”
The ISM manufacturing index was 58.4, the highest level since August 2004.
This index is a diffusion index. Any reading above 50 implies expansion. Today's reading is very strong.
Econoday Report: ISM Mfg Index February 1, 2010
And you can see why, from this article in Bloomberg.
Feb. 1 (Bloomberg) -- Evidence of a self-sustaining U.S. recovery is emerging on the factory floors of Texas Instruments Inc. The second-largest U.S. chipmaker will spend almost $1 billion this year to expand three factories and open a fourth to fill orders.
The need to rebuild industrial capacity after the largest decline on record in 2009 is boosting capital spending and may spur hiring. Beneficiaries are led by technology equipment- makers Intel Corp., Applied Materials Inc. and EMC Corp., as well as industrial product providers General Electric Co. and Rockwell Automation Inc.
Capital spending will increase the total productive capacity of the U.S. economy above its pre-recession level of December 2007, helping gross domestic product grow at a 2.7 percent annual rate in 2010, according to the median forecast of 67 economists in a Jan. 14 Bloomberg News survey. That would be the fastest rate since 2006.
Our business is growing so we have to build out capacity, Dave Pahl, Texas Instruments director of investor relations, said from Dallas. Our customers are increasing what theyre building, so thats increasing our revenue.
Business executives say spending will increase further as profits rise -- third-quarter earnings increased 10.8 percent, according to Commerce Department figures, the most in more than five years -- and demand strengthens. Of U.S. companies followed by Morgan Stanley analysts in New York, 38 percent intend to raise capital spending over the next three months, up from a low of 3 percent in August.
Very Powerful Recovery
The groundwork has been laid for a very powerful recovery in capital spending, said Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities in New York. It wont take much of a spark to get companies to start spending and hiring.
Recovery Accelerates as Company Spending Rises (Update1) - Bloomberg.com
In two fresh indications of a strengthening U.S. economy, a new survey showed that banks have stopped making it tougher for consumers and businesses to borrow, and manufacturing activity climbed to its highest levels in five years.
Monday's manufacturing report, from the Institute for Supply Management, cheered the stock market. The Dow Jones Industrial Average rose 118.20 points, or 1.17% to 10185.53.
Banks in the U.S. haven't entirely turned the corner: While they're not making it tougher to borrow, they're generally not making it any easier, either, according to a Federal Reserve survey released Monday.
Of more than 50 banks surveyed, none said it had tightened business-lending standards for medium or big firms, and only two said they had tightened for smaller firms. By contrast, in the October survey, eight banks tightened business lending to medium or large firms and nine banks tightened them for small firms. Lenders spent much of the past two years ratcheting back on credit amid the financial crisis.
The ISM on Monday said an index compiled from its survey of purchasing managers rose to 58.4 last month from 54.9 in December, the sixth straight month of increase. A reading above 50 indicates expansion.
With manufacturing activity at its highest point since August 2004 and continued month-to-month gains, the sector's recovery appears more sustainable than many economists predicted just a few months ago. That bodes well for the overall economy. Nomura Global Economics said it would likely revise its first-quarter gross domestic product forecast up to 3% or 3.5%, from 2.6%, following the report.
It remains to be seen whether this growth will be sustained once manufacturers have restocked inventories, a key source of the current strength.
"Things are certainly picking up in the manufacturing sector," said Norbert J. Ore, chairman of the survey committee, noting that 13 out of 18 industries experienced growth. "That's what I was looking for...a little more breadth to the recovery to indicate it was spreading."
The ISM's index for new orders expanded at a faster rate last month, while the inventory index showed businesses were reducing stocks at a slower pace. The survey also found tentative signs that manufacturers are at least beginning to think about hiring again. The employment index hit 53.3, up from 50.2 in December. But Mr. Ore said, "I think it's premature to think there would be much in the way of job growth coming out of manufacturing."
Cisco Systems Inc., the world’s biggest maker of networking equipment, predicted that sales growth will accelerate this quarter as customers resume spending to deal with a surge in Internet traffic.
Third-quarter revenue will rise 23 percent to 26 percent from a year earlier, the company said yesterday. That means sales will be at least $10 billion, topping the $9.49 billion average estimate of analysts in a Bloomberg survey.
Chief Executive Officer John Chambers, citing stronger sales in every customer segment and almost every region, said the global economy has entered a new phase of recovery. The San Jose, California-based company is a bellwether for technology spending because it dominates the market for routers and switches, which direct Internet traffic.
“Almost every country is saying their momentum is better than it was before, and almost every business is saying it’s more optimistic,” Chambers, 60, said in an interview. “It shows a capital spending trend that’s hard to deny, on a global basis.”
The economy has entered a new "phase of the recovery," said John Chambers, Cisco's chief executive, in a call with analysts, adding that he planned to hire up to 3,000 workers in coming quarters. "This is one of the most robust positive turnarounds I've seen in my career," he added.
Many are wondering if the recent GDP spurt, based on inventory increase, was a real progress indicator. Then anyone has to wonder why so many businesses are screaming for credit because they can't create the inventory to fill their new orders.
It is likely that the bottom in the economy was either in the second or third quarter. This thread is for evidence that the economy is recovering.
I believe that the economy is going to rebound, albeit it is going to be choppy, and there is a high probability of a double dip.
Having said that, there is evidence that the economy will soon start growing if it is not already.
First piece of evidence presented: Yesterday on their conference call, the CEO of Google said that the worst of the recession is behind us and that the businesses they serve - which is a wide swath of the economy - appear to be picking up.
Second piece of evidence: Many semiconductor companies in their quarterly earnings releases have said they are seeing an increase in shipments, and that end demand for computers and electronics appears to be rising.
During the 60's and 70's manufacturing was the driver for the economy. During the 80's it was finance and credit. During the 90's it was new technology and free trade. During the 00's it was housing and credit. Today manufacturing is dead. Credit, housing, and finance have been reigned in. And both the new technology of the internet and free trade are established. So what's going to be the next driver of the economy? Identify that you will know when recovery is complete...
Many are wondering if the recent GDP spurt, based on inventory increase, was a real progress indicator. Then anyone has to wonder why so many businesses are screaming for credit because they can't create the inventory to fill their new orders.
There are actually people who get paid to be as stupid as analysts can be, and then report what they say and publish.
"Crow, James Crow: Shaken, Not Stirred!"
(Great Half-Wit Father send rotted corn and disease-filled blankets to former enemies in Mideast, now friends, with treaties. Need even more inventory for homeland friends! Great Half-Wit Father: Know About Oslo version of World Peace!)
Yes, the economy is not better in any noticeable way, but look at this chart!!!
On the chart below notice how after Ovomit took office the seasonally adjusted line went from choppy to smooth & steeply up. Then for the first time in history on an unemployment spike the seasonally adjusted line went way above the actual not-seasonally adjusted line instead of holding below as it always has before. This scam was to make the headline number appear far worse than it actually was so he could blame it on Bush. Then he had VP Joe Biden go on TV & say "The economy is in much worse shape than we thought it was in" Then in March Obama has "The Working Group" buy the stock market up to 10,000 & holding. After that time the adjusted numbers go down against the unadjusted numbers to make unemployment appear to drop while it continued to climb. The discrepancy is the largest in history & is now up to 1 million.
Consumer Confidence Index fell almost 11 points to 46 in February, down from a revised 56.5 in January. Analysts were expecting only a slight decrease to 55.
The increasing pessimism is a big blow to hopes that consumer spending will power an economic recovery. Economists watch the confidence numbers closely because consumer spending accounts for about 70 percent of U.S. economic activity.
The February reading is a long way from what's considered healthy: A reading above 90 means the economy is on solid footing. Above 100 signals strong growth.
Walmart has reported lower-than-forecast sales figures for its fiscal fourth quarter, and said it expects its US outlets to have a challenging first quarter. For the quarter ending 31 January, revenue rose by a lower-than-expected 4.5% to $113.7bn, even as net profit rose by 22% to $46.3bn ($1.21 a share). Excluding a tax benefit and a restructuring charge, profit amounted to $1.17 a share.
However, US same-store sales were down 1.6% on the year, beating the companys own forecast of sales not declining by more than 1%. Walmart said sales were affected after it cut prices to attract shoppers living from paycheck to paycheck.
