BHS The Line Update with Greg Heym, Chief Economist.

Posted on by Dena driver

Good Morning!
Today we’ll look at the latest on unemployment claims and retail sales.

1
Initial Claims for Unemployment Rise to 855,00

Last week, 885,000 new jobless claims were filed, up from a revised 862,000 the prior week. Economists were expecting this number to decline to 808,000, so this is disappointing news. The 885,000 claims are also the most since the week of September 5.

The lone bit of good news in the report was the continuing unemployment claims fell by 273,000 to 5.5 million.

2
Retail Sales Fall for the Second Straight Month

Retail sales fell by more than expected last month, coming in 1.1% below October’s level. Sales fell in 10 of the 13 major categories tracked, which included a 4.0% decline in restaurants and bars, a 1.7% drop in auto sales, and a 6.8% plunge in clothing sales.

2
What Does the Data Tell Us About the Economy

The recovery is slowing. Rising unemployment claims and declining consumer spending are reflecting the impact of increased virus cases and subsequent lockdowns, and the lack of a new stimulus package. Since consumer spending is roughly 70% of GDP, this data is concerning.

The good news is these factors will be temporary. With vaccinations starting this week, it’s just a matter of time before the virus is under control. I understand that vaccinations will not happen fast enough to prevent further lockdowns, like the one New York faces in the coming weeks. But I’m confident if NY does shut down, it will be for a few weeks instead of months.

There is also hope on the stimulus front, let’s hope they finally get it done.

Here is some good news to start your weekend off, mortgage rates fell to yet another record low this week.

Have a great weekend.