US retail sales and continuing jobless claims beats forecastsOn July 16, 2020 by Thomas Belayneh
The Federal Reserve’s beige book (a report published eight times a year providing commentary on current and future economic conditions based on survey responses from key business contacts, economists, market experts, and other sources) set the tone for this week’s positive economic data out of the US.
The report found activity had increased in each of its twelve federal reserve districts with rises in retail sales led by a rebound in car sales, as well as a sustained rise in food and beverage sales.
Net employment rose in almost all districts, although the Federal Reserve Bank of Chicago, who are charged with preparing the Beige Book, stressed that activity levels were still some way off pre-pandemic levels.
Consistent with the commentary in the Beige Book, retail sales in June rose 7.5% month-on-month to $524.3bn, beating the consensus forecast for 5%.
Car and related parts sales (the largest constituent of retail sales) were up 8.2% to $110.2bn, while clothing and clothing accessories sales saw a gargantuan 105.1% rise to $17.1bn in June from $8.34bn in May.
Also presenting large gains were furniture & home furnishings sales, which were up 32.5% to $9.58bn, as well as electronics and appliance sales, increasing 37.4% to $7.05bn.
A concerning feature of the data, however, was the decline in food and beverage sales, which were at odds with the increase noted in the Beige Book.
Food and beverage sales is the second largest constituent of retail sales and this fell by 1.2% to $71.8bn, although one must note that it is higher on a yearly basis by 12.4%.
Retail sales growth cooled in June after growing as much as 18.2% in May.
Unemployment insurance weekly claims
New (initial) jobless claims came down slightly in the week ending 10th July, falling to 1.3m claims although slightly more than the 1.25m that economists forecasted. The previous week’s initial claims was revised down by 4,000 to 1,310,000. This week’s release was the lowest since the week ending 14th March.
The insured unemployment rate for the week ending 4th July was 11.9%, which represented a fall of 0.3% on the prior week’s revised rate. The prior week’s unemployment rate was also revised down, decreasing by 0.2% to 12.2%.
Although the level of initial claims remained elevated as compared to the same period last year, which only saw 217,000 of initial claims, the number of continuing claims continued to decline, falling by 422,000 to 17,338,000 for the week ending 4th July, which was comfortably below expectations for 17,600,000.
Indiana and Florida saw the greatest falls in initial claims, falling by 22,700 and 17,400, respectively, while Texas and New Jersey saw the greatest increases in initial claims, rising by 20,506 and 19,410, respectively.
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