Finally some good economic news

[Puppycow]

Retail Sales Rebound, Beating Forecasts (http://www.nytimes.com/2010/12/28/business/28shop.html?src=busln)

After a 6 percent free fall in 2008 and a 4 percent uptick last year, retail spending rose 5.5 percent in the 50 days before Christmas, exceeding even the more optimistic forecasts, according to MasterCard Advisors SpendingPulse, which tracks retail spending.

The rise was seen in just about every retail category. Apparel led the way, with an increase of 11.2 percent. Jewelry was up 8.4 percent, and luxury goods like handbags and expensive department-store clothes increased 6.7 percent. There was even a slight increase in purchases of home furniture, which had four consecutive years of declining sales. The figures include in-store and online sales, and exclude autos.

[Malerin]

Maybe we'll see some job creation.

[Puppycow]

Maybe we'll see some job creation.

And more good news there too:

Jobless claims drop below 400,000 mark (http://money.cnn.com/2010/12/30/news/economy/jobless_claims/)

NEW YORK (CNNMoney.com) -- For the first time in more than two years, the number of Americans filing for their first week of unemployment benefits fell below 400,000 last week -- a ray of hope in the one of the longest job droughts in U.S. history.

The number of initial claims fell to 388,000 in the week ended Dec. 25, down 34,000 from the week before, the Labor Department said Thursday.

The report marks the first time claims have broken below 400,000 since July 2008 -- two months before the financial crisis peaked with the Lehman Brothers bankruptcy.

"It's impressive to finally see unemployment claims fall below 400,000," said Stuart Hoffman, chief economist with PNC Financial Services, who said that if there were a magic number for unemployment claims, 400,000 would be it.
Chart looks good too:

[UWdude]

who said that if there were a magic number for unemployment claims, 400,000 would be it.

JREF believes in magic? Oh wait, that statement is an illusion, like all magic. There is nothing special about 400,000. More optimistic spin on a crap sandwich.

[Chodorov]

This is not good economic news. Consumption is where wealth is destroyed. Not where it is produced. Paying off debts or cancelling them would be good economic news.

[drkitten]

This is not good economic news. Consumption is where wealth is destroyed. Not where it is produced. Paying off debts or cancelling them would be good economic news.

Um,.... no.

Lack of consumption is the reason that wealth isn't being created right now; we have the capacity for tremendous amounts of wealth creation that's basically sitting idle. It's not going to start doing anything until the people who control the capacity think that they can actually sell the wealth they create.

That's not a long-term statement, of course; in the long run what is needed is a balance of consumption and production; but right now, underconsumption (and overproduction) is the problem, so higher consumption is what is needed.

[Chodorov]

No thats wrong. Lack of PRODUCTION spending is the reason wealth isn't being created right now. We must disaggregate between total spending and consumption spending. Promoting consumption spending may increase GDP in the short-run. But it destroys wealth immediately. But you need to know the level of Gross Domestic Business Revenues. And we don't have that information readily available. If retail spending is down, but business revenues are up, then thats a sign of wealth creation.

[drkitten]

No thats wrong. Lack of PRODUCTION spending is the reason wealth isn't being created right now. We must disaggregate between total spending and consumption spending. Promoting consumption spending may increase GDP in the short-run. But it destroys wealth immediately. But you need to know the level of Gross Domestic Business Revenues. And we don't have that information readily available. If retail spending is down, but business revenues are up, then thats a sign of wealth creation.

:notm

[Chodorov]

You are getting mixed up between total spending and retail spending. Clearly you are wrong. This is why there is 20% unemployment at the moment. People going in for anti-scientific woo theories of economics.

[drkitten]

You are getting mixed up between total spending and retail spending. Clearly you are wrong. This is why there is 20% unemployment at the moment. People going in for anti-scientific woo theories of economics.

:notm

[NewtonTrino]

I started moving heavily back into the market in early december once I saw things looking up. My gut is telling me we are on a serious upswing and 2011 is going to be a good year. We'll see.

Of course it's hard not to be upbeat sitting on my balcony watching Cabo fade into the distance.

[Chodorov]

The stock market going up is not the same as economic health. On another note Dr Kitten has confessed his love for swimming in brown woo. Its a fact that spending on producer goods is what creates economic wealth. The contrary thesis is an irrational unscientific thesis for parasites and spoon-benders. And obviously so by the way. Its not as if there need be controversy about the simple stuff.

[djpar]

My gut is telling me we are on a serious upswing and 2011 is going to be a good year. We'll see.


Not sure this is a trustworthy methodology. :p

[Puppycow]

JREF believes in magic? Oh wait, that statement is an illusion, like all magic. There is nothing special about 400,000. More optimistic spin on a crap sandwich.

:rolleyes:

[NewtonTrino]

Not sure this is a trustworthy methodology. :p

Being positive is it's own reward though.

[NewtonTrino]

The stock market going up is not the same as economic health. On another note Dr Kitten has confessed his love for swimming in brown woo. Its a fact that spending on producer goods is what creates economic wealth. The contrary thesis is an irrational unscientific thesis for parasites and spoon-benders. And obviously so by the way. Its not as if there need be controversy about the simple stuff.

I don't disagree with you but I'm not just talking about stocks. I think stocks will do well because we are going to get decent economic growth. This doesn't mean that everyone out of work will immediately get a job either.

[theprestige]

I'm just as much in favor of good economic news as the next guy, but has anybody seriously considered the possibility that these spending numbers describe people who used to spend freely all year long, but who now scrape and save for the annual sales and the traditional gift-giving season, and who will promptly return to spending nothing at all as soon as the season is over?

I mean, are they spending now because their economic situation has turned around (coincidentally, during the period of biggest sales and customary gift-buying), or are they spending now because their economic situation has been so consistently bad all year that now (coincidentally, during the period of biggest sales and customary gift-buying) is the only period they can afford to spend and justify such spending?

Sure, this year's holiday season spending beat last year's holiday season spending. But if this year's overall spending is still less than last year's overall spending, that suggests to me that this year's holiday spending doesn't represent an economic recovery so much as an economic adaptation. Hard times are here, so you save up for the really important spending, and let everything else slide.

Now, if you were to tell me that spending was up in the three months following the 2010 holiday season, January-March 2011, let's say, that would seem to me like good economic news.

[Puppycow]

I'm just as much in favor of good economic news as the next guy, but has anybody seriously considered the possibility that these spending numbers describe people who used to spend freely all year long, but who now scrape and save for the annual sales and the traditional gift-giving season, and who will promptly return to spending nothing at all as soon as the season is over?

I mean, are they spending now because their economic situation has turned around (coincidentally, during the period of biggest sales and customary gift-buying), or are they spending now because their economic situation has been so consistently bad all year that now (coincidentally, during the period of biggest sales and customary gift-buying) is the only period they can afford to spend and justify such spending?

Sure, this year's holiday season spending beat last year's holiday season spending. But if this year's overall spending is still less than last year's overall spending, that suggests to me that this year's holiday spending doesn't represent an economic recovery so much as an economic adaptation. Hard times are here, so you save up for the really important spending, and let everything else slide.

Now, if you were to tell me that spending was up in the three months following the 2010 holiday season, January-March 2011, let's say, that would seem to me like good economic news.

According to government reports, which you can see here (http://www.census.gov/retail/marts/www/marts_current.pdf), retail spending for the first 11 months of the year was up 6.5%, so no, this uptick isn't just limited to the holiday season.

[Puppycow]

Another sign that the job market really is improving:

Weekly U.S. jobless claims drop 36,000
(http://www.marketwatch.com/story/weekly-us-jobless-claims-drop-36000-2011-02-10)

Again below the "magic" 400,000 for the second time since the week ended Dec. 25th.

ETA: Also, Retail sales for 2010 (http://www.census.gov/retail/marts/www/marts_current.pdf) were up 6.6% from 2009. Furthermore, the unemployment rate has fallen from 9.8% to 9.0% in the last 2 months.

[djpar]

So basically, it's almost time to short equities? :D

[Puppycow]

Weekly jobless claims (http://www.marketwatch.com/story/weekly-jobless-claims-decline-22000-to-391000-2011-02-24) come in again below 'magic' 400 K.

4-week average is now just a hair over 400 K at 402 K.

Continuing claims, which reflect the number of people already receiving state unemployment compensation, dropped 145,000 to a seasonally adjusted 3.79 million in the week of Feb. 12. About 9.16 million Americans were getting some kind of state or federal benefit in the week ended Feb. 5, down 89,782 from the prior week.

All in all, shaping up to be a pretty good month. Next monthly unemployment report is a week from Friday.