Reclaiming Common Sense

This week was a slow week for economic data. The Consumer Price Index was released, as were the MARTS monthly retail numbers, and the weekly unemployment claims data. There were significant revisions to the MARTS data. More research will have to be done to see what happened.

(June 11) The week started with two forecast articles. The real estate market is critical to the rest of the economy. New and existing home sales are retail multipliers and workforce multipliers. "May Real Estate Forecast: How High" projected surges in new construction starts, units under construction, completions, new home sales, and existing home sales. Inventory should rise for new and existing homes. Record sales prices are possible, if not probable.

(June 12) Real estate sales are retail multipliers. People need new electronics and appliances, new furniture and furnishings, new home and garden materials, and sometimes a new car to place in a new garage. "May Retail Can Jump 5% from last May" projected month to month growth in all retail sectors and May to May same month growth in all but two sectors.

(June 12) There were many people concerned that high gasoline prices would negatively impact the retail sales report data in multiple sectors. "May Inflation was Healthy" reported on the CPI data and relayed that there was inflation in energy. What has been ignored by most commentators is that there has been commodity deflation and service inflation. We are already seeing relief from the Memorial Day Weekend Gasoline Spikes here in Ohio.

(June 14) The Weekly unemployment claims data was released Thursday at 8:30 A.M.  Continuing claims fell to the lowest levels recorded, anytime of year, since 1988. "Weekly Unemployment Claims Seriously Low" also looked at the first-time unemployment claims data and the Insured Unemployment Rate (IUR.)

(June 14) Retail sales soared during May. Retail sales jumped from April to May this year. We are on-track for the best full year of retail sales. Retail sales were up May 2018 over the May 2017 levels for all but one sector. There were major revisions to the data. Month to month growth approached 9.00%. May to May growth exceeded 6%. The rolling year growth for the past 12 months almost broke the 5% rate, even after revisions to the preceding data periods. "May Retail Sales Set Another Record" goes into detail. The rolling year growth, even after revisions, was strong, the current year growth was stronger than the rolling year growth. The  May only growth was stronger than both of these measures. The month to month growth was stronger all three measures.

There were a number of discussions regarding the retail sales report this week. What was missing was a discussion regarding the revisions of the prior data. Next week will be a "working vacation for me. I will work on analyzing the data while on vacation. Next week we will receive data on new construction and existing home sales.

It's the economy.