Retail Sales Strong. Jobless Clain Spike but…

Initial Jobless Claims (week ended 12/7/2013)

– New Claims (seasonally adjusted) 368,000. Previous revised to 300,000
– 4-week Moving Average  328,750. Previous was 322,750
– New Claims (unadjusted) totaled 461,422 an increase of 146,241 from the previous week.

While the data is ugly on the surface, I would be careful reading too much into this data because the raw data is always volatile in December and the seasonal adjustments this month are also large.

Retail Sales (November 2013)

– Retail Sales Month/Month +0.7%. Previous was +0.6%
– Retail Sales less autos Month/Month 0.4%. Previous was +0.5%
– Less Autos & Gas Month/Month +0.6%. Previous was +0,6%

This data is healthier than the recent Chain Store Sales numbers which are much less complete than Retail Sales.  This stronger Retail Sales data undermines my recent concern that the large portion of the increase in 3rdQ2013GDP was due to inventory growth and that growth would disappear in the 4thQ.  If retail customers are buying that inventory than it is simply the case that stores had a good idea as to what would happen.

Import and Export Prices (November 2013)

– Export Prices Month/Month +0.1%
– Export Prices Year/Year -1.6%
– Import Prices Month/Month -0.6%
– Import Prices Year/Year -1.5%

Clearly, inflation is not happening.  PPI is out tomorrow. Enormously increased Monetary Base consequent to QEIII has not led to inflation in the price of goods.  The only inflation we have seen is in the price of equities.

Business Inventories (October 2013)

– Inventories Month/month +0.7%. Previous was +0.6%.  The fact that this lines up with Retail sales supports the idea mentioned above that Inventories are not getting ahead of retail and that we will not see a significant bite out of GDP.