Economic News in Review Greenville SC
Here is last week’s Economic News in Review Greenville SC.
Retail sales took a tumble, while low petroleum prices tempered wholesale inventory growth, and initial jobless claims experienced a significant bump.
The big news last week was that retail sales fell 0.8 percent in January, the second month in a row in which retail transactions dipped, according to numbers released by the Census Bureau last month. Retail and food services transactions for January totaled $439.8 billion, which while down from December, was still 3.3 percent higher than January 2014.
Looking at notable retail sectors, incredibly low prices at the pump saw gasoline sales fall a whopping 9.3 percent; sporting goods, hobby and book sales dropped 2.6 percent; and motor vehicle dealers took a 1 percent hit. Meanwhile, sales for food and drink services grew 0.8 percent and building material and garden supplies were up 0.6 percent.
Despite cheap gas prices and December’s gains in personal incomes, consumers simply weren’t spending as much, which led many economists to suggest that Americans might be using their cash to pay down debts or save more (personal savings did grow in December). At present, two months’ contraction doesn’t constitute a solid trend.
“Should we be worried about the weakness of underlying sales over the past two months? Possibly,” Capital Economics U.S. economist Paul Ashworth told Reuters. “But all the conditions are in place for a period of very strong consumption growth. We still expect to see that strength come through in the retail sales data soon.”
Total inventories of merchant wholesalers grew .01 percent to hit $547.6 billion in December, the Census Bureau reported last week. While the data takes longer to produce and might seem a little dusty, wholesale inventories are a key economic data point because they indicate whether or not the supply-side of the economy is anticipating growth. Compared to the previous year, wholesale inventories were up 6.7 percent from December 2013.
While inventories were up, the growth was lower than projections, and the key reason for that came down to one word: oil. Low crude oil prices reduced the value of petroleum stocks, which in turn reduced the inventories. The Bureau reported that January’s inventories of petroleum and petroleum products were down 6.2 percent from previous month.
Meanwhile, sales for merchant wholesalers dropped 0.4 percent in January, falling to $449.8 billion. Once again, oil was a key component with sales of petroleum and petroleum products falling 13.7 percent. This put December’s wholesale inventories-to-sales ratio at 1.22, compared to December 2013’s ratio of 1.16.
Initial Jobless Claims
First-time claims for unemployment benefits filed during the week ending Feb. 7 grew to 304,000, an unexpected and sizable gain of 25,000 claims from the previous week’s revised level of 279,000 claims, the Employment and Training Administration reported last week. Job market watchers had expected claims to grow to only 285,000.
The Administration did not note any special factors related to the increase, but some analysts said cold weather could be a contributor and warned not to regard a single week’s activity as a trend.
“Initial unemployment insurance claims are often volatile in the winter due to bad weather and holidays,” PNC Financial Services Group economist Gus Faucher told the Wall Street Journal. Faucher added that in reviewing past weekly lay-off activity, the claims totals were “consistent with job growth of better than 200,000 per month.”
Bearing that in mind, the four-week moving average — considered a more stable measure of lay-offs — dropped to 289,750 new claims, a decline of 3,250 claims from the previous week’s revised average of 293,000. This kept average claims activity comfortably below the 300,000-claim mark.
Economic News in Review Greenville SC
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