Jobless Claims, Foreclosures & Retail Sales – A Triple Whammy
August 13, 2009 · Posted in General Economics
As per latest AP reports, Jobless claims up, retail sales dip unexpectedly:
There were 617,000 new jobless claims in late June, before the figures were distorted last month by a shift in the timing of temporary auto plant shutdowns. That shift caused claims to drop sharply and then jump up last month.
Claims fell steeply last week, however, when the data were no longer affected by the distortions.
Still, initial claims remain far above the roughly 325,000 that economists say is consistent with a healthy economy. New claims last fell below 300,000 in early 2007.
Including federal emergency benefit programs, 9.25 million people received unemployment compensation in the week ending July 25, the latest data available. That’s down from a record of 9.35 million the previous week. Congress has added up to 53 extra weeks of benefits on top of the 26 typically provided by the states.
According to Realtytrac.com, new records are being set in foreclosure activity:
The foreclosure plague continued to devastate last month.
There were more than 360,000 properties with foreclosure filings — including default notices, scheduled auctions and bank repossessions — an increase of 7% from June and 32% from July 2008, according to RealtyTrac, an online marketer of foreclosed homes. In fact, one in every 355 U.S. homes had at least one filing during July.
“July marks the third time in the last five months where we’ve seen a new record set for foreclosure activity,” said James J. Saccacio, chief executive officer of RealtyTrac. “Despite continued efforts by the federal government and state governments to patch together a safety net for distressed homeowners, we’re seeing significant growth in both the initial notices of default and in the bank repossessions.”
The jump occurred as several foreclosure moratoriums phased out. They were initiated by many states to give the administration’s foreclosure-prevention efforts time to work. But for many help did not come: The modification and refinancing programs have met with less success than hoped.
… and last but not least, retail sales fell unexpectedly:
Sales at U.S. retailers unexpectedly fell in July from June, a government report showed on Thursday, casting a shadow over an anticipated rebound in consumer spending in the third quarter.
The Commerce Department said total retail sales edged down 0.1 percent from increasing a revised 0.8 percent in June. Sales in June were initially reported to have risen 0.6 percent.
Analysts polled by Reuters had forecast retail sales rising 0.7 percent in July, expecting a boost from the government’s “cash for clunkers” program, which gives consumers cash to swap aging gas-guzzlers for new, more fuel efficient models.
Excluding motor vehicles and parts, sales fell 0.6 percent in July after rising 0.5 percent the prior month. Analysts had expected a 0.1 percent gain in sales excluding autos.
Gasoline station sales fell 2.1 percent in July, reflecting a retreat in gasoline prices during the month, after surging 6.3 percent in June. Excluding gasoline, retail sales nudged up 0.1 percent. Sales of building materials were down 2.1 percent in July after falling 0.6 percent in June.