Economic News in Review Greenville SC
Here is last week’s Economic News in Review Greenville SC.
The sharp drop in gas prices hurt December retail sales and sent consumer prices to a six-year low, while layoffs of holiday hires pushed initial jobless claims hit a four-month high.
December’s retail performance was an example of how one variable can throw off a monthly total. Sales of retail goods and food services sales for December dropped 0.9 percent to 442.9 billion, according to advanced figures released last week by the Census Bureau. While sales were down for the month, they were still up 3.2 percent from December 2013.
The big factor was energy costs, and specifically gasoline sales, which fell a considerable 6.5 percent during December. This, of course, has to do with the substantial drop in gasoline prices, which economists are still trying to definitively explain; gas prices in December were 58 percent lower than the $107-a-barrel high set in July. Given that variable, December’s drop is likely not indicative of a trend.
“There is [no] basis for believing the weakness in December alone represents a change in the trend,” High Frequency Economics’ Jim O’Sullivan told Fortune.
Other notable retail sectors were electronics stores, which dropped 1.6 percent; building materials stores, which dipped 1.9 percent; general merchandise stores, which fell 0.9 percent; clothing stores, which were up 0.8 percent; furniture stores, which gained 0.8 percent; and health stores which grew 0.5 percent.
Consumer Price Index
In related news, the consumer price index for December dropped 0.4, the Bureau of Labor Statistics reported last week. On a year basis, the index was up 0.8 percent from December 2013. This was the biggest cost of living drop in six years.
Like retail sales, the big influence on December’s prices was gasoline, index for which dropped by a considerable 9.4 percent. The fuel oil index also saw a steep drop, falling 7.8 percent for the month. As a whole, the energy index was down 4.7 percent.
“The gasoline plunge was massive in the CPI for the past two months, and is about to upgrade to gargantuan in early 2015,” IHS Global Insight U.S. economist Michael Montgomery told the Los Angeles Times.
Initial Jobless Claims
Initial jobless claims hit their highest point since September, according to data released last week by the Employment and Training Administration. First-time claims for unemployment benefits filed by the newly unemployed during the week ending Jan. 10 shot up to 316,000 claims, a substantial increase of 19,000 from the preceding week’s revised level of 297,000.
Most economists chalked up the large gain to holiday workers finally being laid off, and initial lay-off figures should return to a figure near 300,000 in coming weeks.
“It happens at the beginning of every calendar quarter and the beginning of every year, so it’s difficult to seasonally adjust at this time,” Societe Generale senior U.S. economist Brian Jones told the Bloomberg news service. “People are finding work. The labor market is fine.”
The four-week moving average, considered a much more stable gauge of jobless activity, grew to 298,000, a 6,750-claim gain from the prior week’s revised average of 291,250.
This week we can expect:
- Wednesday — Housing starts and building permits for December from the Census Bureau.
- Thursday — Initial jobless claims for last week from the Employment and Training Administration.
Friday — Existing home sale for December from the National Association of Realtors; leading economic indicators for December from the Conference Board
Economic News in Review Greenville SC
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