Jobless claims rose a bit to 558,000 (higher than exected), and retail sales for July fell (much worse than expected).
Both are surprising, given the widespread consensus that we’re in the middle of a v-shaped recovery.
Will these data points finally kill the rally dead…or will traders dismiss them as noise and start scarfing up stocks again? We’re on the edge of our seats.
WSJ on Retail Sales: U.S. retail sales unexpectedly fell in July despite the debut of the government’s “cash for clunkers” program meant to jump-start the auto business and help turn around the economy.
Retail sales last month dropped 0.1%, the Commerce Department said Thursday.
The dip was a huge disappointment on Wall Street. Vouchers for the car rebate program weren’t available until the last part of July; perhaps the program will have a more positive effect on overall retail sales for August.
Demand for goods aside from cars took a large tumble last month, with big declines for housing-related retailers and electronic stores.
Excluding autos, all other retail sales dropped 0.6%; economists expected a 0.1% gain.
Economists surveyed by Dow Jones Newswires forecast a 0.8% increase in July retail sales. June sales rose 0.8%, revised up from an originally reported 0.6% increase.
Initial claims for jobless benefits rose by 4,000 to 558,000 on a seasonally adjusted basis in the week ending Aug. 8, the labour Department said in its weekly report Thursday. The four-week average of new claims, which aims to smooth volatility in the data, rose by 8,500 to 565,000 — the highest since July 18.
The tally of continuing claims — those drawn by workers for more than one week — fell by 141,000 during the week ended August 1 to 6,202,000 — the lowest level since April 11.
Economists surveyed by Dow Jones had predicted a decrease in initial claims of 5,000.
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