Retail Sales Slumping in US, US Recovery Still Fragile
U.S. Retail Sales Weaken Further
It's a potential first sign that the greatly advertised ECRI recession 2012 call in the US may actually have something to it, retail sales have been on a marked weakening trend throughout January, this after official figures showed December to be far less robust than anecdotal surveys were initially suggesting.
Back in December, economists and stock market prognosticators everywhere began largely declaring the risk of renewed US recession over, with initial retail sales reports coming in exceeding expectations, combined with sharply declining initial unemployment claims, lower unemployment rates, and even some rebounds in manufacturing.
While January has still seen lower initial unemployment claims and slightly stronger regional manufacturing reports, one of the most key drivers to future growth in the US, consumer spending, has apparently picked up in the slumping category where manufacturing left off.
With these new figures coming in, GDP in the first quarter of 2012 risks turning into a repeat of Q1 2011 (astonishingly weak - even flat). Nonetheless, ECRI's expertise has apparently been called into question, so far, this time. After having unequivocally stated last fall that the US was sliding into a new recession, and that there would be nothing governments could do to change that, it would appear that, in fact, additional government stimulus and central bank quantitative easing, timed with manufacturing rebounds after the nuclear disaster in Japan shut down large sectors of industry, has not only kept GDP from going negative, but juiced it up a bit during the final stretch of 2011.
Econoday.com
RedbookReleased on 1/24/2012 8:55:00 AM For wk1/21, 2012PriorActualStore Sales Y/Y change2.8 %2.5 %
Highlights
The weekly store sales reports are reporting substantial slowing so far in January but against strong December indications that were not confirmed by what turned out to be a soft December retail sales report from the government. Redbook's year-on-year same-store sales rate fell 1/2 percentage point in the January 21 week to plus 2.8 percent, nearly half of Redbook's peak rate in December of 5.3 percent. Month-to-month, Redbook's data point to a 1.6 percent drop that indicates significant weakness for the government's ex-auto ex-gas category. Both Redbook and ICSC-Goldman say heavy weather has been holding down sales so far this month.
This pronounced slump in retail sales confirms what we have already been witnessing with a prolonged and pronounced slog (this case also a classic "double dip") in DOT Vehicle Miles Driven - a move that since its inception has been a pretty reliable harbinger of recessions:
Credit: www.CalculatedRiskBlog
One of ECRI's chief competitors in the arena of business cycle forecasting, Moody's Analytics, has not been so bold as to call for certain recession, and in fact, their Risk of Recession within six months has fallen back from a high of about 45% hit last fall, to now less than one-in-three. Read more below:
Moody's
U.S. Macro Outlook: A Tentatively Better Year
By Mark Zandi in West Chester
January 11, 2012
ShareThis
View the Moody's Analytics U.S. Macro Forecast. Read a special report on the 2012 outlook.
The U.S. economy showed some strength as 2011 ended. Real GDP likely grew faster than 3% annualized in the fourth quarter, driven by solid holiday and vehicle sales, sturdy business investment and even some improvement in construction. The labor market has also brightened, with job gains accelerating to about 200,000 per month. This was enough to bring the jobless rate to a nearly three-year low of 8.5%...
It's a potential first sign that the greatly advertised ECRI recession 2012 call in the US may actually have something to it, retail sales have been on a marked weakening trend throughout January, this after official figures showed December to be far less robust than anecdotal surveys were initially suggesting.
Back in December, economists and stock market prognosticators everywhere began largely declaring the risk of renewed US recession over, with initial retail sales reports coming in exceeding expectations, combined with sharply declining initial unemployment claims, lower unemployment rates, and even some rebounds in manufacturing.
While January has still seen lower initial unemployment claims and slightly stronger regional manufacturing reports, one of the most key drivers to future growth in the US, consumer spending, has apparently picked up in the slumping category where manufacturing left off.
With these new figures coming in, GDP in the first quarter of 2012 risks turning into a repeat of Q1 2011 (astonishingly weak - even flat). Nonetheless, ECRI's expertise has apparently been called into question, so far, this time. After having unequivocally stated last fall that the US was sliding into a new recession, and that there would be nothing governments could do to change that, it would appear that, in fact, additional government stimulus and central bank quantitative easing, timed with manufacturing rebounds after the nuclear disaster in Japan shut down large sectors of industry, has not only kept GDP from going negative, but juiced it up a bit during the final stretch of 2011.
Econoday.com
RedbookReleased on 1/24/2012 8:55:00 AM For wk1/21, 2012PriorActualStore Sales Y/Y change2.8 %2.5 %
Highlights
The weekly store sales reports are reporting substantial slowing so far in January but against strong December indications that were not confirmed by what turned out to be a soft December retail sales report from the government. Redbook's year-on-year same-store sales rate fell 1/2 percentage point in the January 21 week to plus 2.8 percent, nearly half of Redbook's peak rate in December of 5.3 percent. Month-to-month, Redbook's data point to a 1.6 percent drop that indicates significant weakness for the government's ex-auto ex-gas category. Both Redbook and ICSC-Goldman say heavy weather has been holding down sales so far this month.
This pronounced slump in retail sales confirms what we have already been witnessing with a prolonged and pronounced slog (this case also a classic "double dip") in DOT Vehicle Miles Driven - a move that since its inception has been a pretty reliable harbinger of recessions:
Credit: www.CalculatedRiskBlog
One of ECRI's chief competitors in the arena of business cycle forecasting, Moody's Analytics, has not been so bold as to call for certain recession, and in fact, their Risk of Recession within six months has fallen back from a high of about 45% hit last fall, to now less than one-in-three. Read more below:
Moody's
U.S. Macro Outlook: A Tentatively Better Year
By Mark Zandi in West Chester
January 11, 2012
ShareThis
View the Moody's Analytics U.S. Macro Forecast. Read a special report on the 2012 outlook.
- U.S. economic output and hiring growth improved as 2011 came to an end.
- A better performance in 2012 hangs on decisions by U.S. and European policymakers.
- The unemployment rate fell in 2011 in part because of a stagnant U.S. labor force.
- Full employment, defined as a jobless rate of 6% or better, won't return before 2015.
- Federal fiscal policy will be a drag on the economy through 2013, even if Congress extends tax cuts and jobless benefits.
The U.S. economy showed some strength as 2011 ended. Real GDP likely grew faster than 3% annualized in the fourth quarter, driven by solid holiday and vehicle sales, sturdy business investment and even some improvement in construction. The labor market has also brightened, with job gains accelerating to about 200,000 per month. This was enough to bring the jobless rate to a nearly three-year low of 8.5%...