May 16, 2008
Unemployment Trends & Consumer Spending
1. For the week ending May 10, initial jobless claims climbed by 6,000 to 371,000.
2. Continuing claims for the week ending May 3 grew to 3.06 million (+28,0000)
3. Specifically, New York, Pennsylvania, and Wisconsin reported increases > 1,000 in claims
4. Conversely, New Jersey and Georgia reported a decrease > 1,000 in claims.
Overall, the unemployment insurance claims appear to be trending upwards YoY over the last three years. I feel that it will be important to keep an eye on these numbers, because there is a high likelihood for them to affect consumer spending. We know that it is consumer spending that affects the economy, but there have been mixed inputs as of late.The rebate checks ($600) were thought of to be a means of stimulating the economy by getting consumers to spend. But so far, this does not seem to be probable.
Retail Sales Data, via the Big Picture
Looking at the recent retail sale data, with this graph, we can see that the only places with an increase in retail spending were gas stations and groceries. This appears to be a shift away from discretionary goods to what is absolutely necessary. It will be difficult to see how consumers will be able to keep up. Just today oil hit $127 a barrel and recently data has come to show that consumer debt is only increasing.
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