Economic data

Dec Retail Sales unexpectedly fell by .3% headline and .2% ex auto’s. The consensus was for gains of .5% and .3%. Sales ex auto’s and gasoline fell .3% vs an expected gain of .2%. Nov however was revised higher in all 3 categories by .4-.6% and we must take both months together in gauging the state of retail sales because of the holiday season and thus everything is about in line if that is done. The only group that saw weakness in both Nov and Dec was clothing and the groups that saw gains in both months were furniture, health/personal care, sporting goods and online retailers.

Initial Jobless Claims totaled 444k, 7k above expectations and up from a revised 433k last week. Continuing Claims, delayed by 1 week, fell by 211k and was 154k below estimates. Those collecting claims past 26 weeks, delayed by 2 weeks, fell by 135k but there is not enough information in today’s data to say whether it is due to the finding of a new job or the exhaustion of benefits. The last measurement of the exhaustion rate (the % of people who started collecting benefits and have used them up before finding a job) was at the end of Nov and it reached 54%, an all time high. Unemployment benefits can last up to 99 weeks in some states. Either way, the pace of firings still is a big improvement as the 4 week average of initial claims is down to 441k, the lowest since Aug ’08 but gains in employment still remain subdued.

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