This week was a roller coaster week in the stock markets with that first big dip, and many twist and turns, that ended up nearly back where we started. This big news wasn't really explained in the media very well. Retail Sales set an April record, up nearly 5% from last April while weekly first-time claims dropped significantly to one of the lowest levels for the Second Week of May.
(May 14) The week started with the article "April Retail Sales Forecast: Slowing while Growing." Last year we had our first $6 trillion total retail sales year, according to the MARTS (Monthly and Annual Retail Trade Survey) data. The rate of growth of sales had been slowing, non-seasonally adjusted, had been slowing since last Summer, dropping below a robust 5% and heading toward a still strong 4%. This month the data was expected to remain above 4%. This month it was expected that all but two retail sectors would contract month to month while all sectors except one grew April to April. It is good to know what to expect when the report is finally released.
(May 15) The April Retail Sales Report was better than expected, and reported as being weaker than March. "April Retail Sales Record a Rebound" explains that the same month growth was 4.97%. All sectors except four had record levels of sales for April. Gasoline Sales was not a record April. Neither were Electronics and Appliances, Furniture and Furnishings, nor the Sporting Goods, Hobbies, Books, and Music sector. We are still in our Retail Renaissance.
(May 16) We had our sixth week this year with the non-seasonally adjusted first-time unemployment claims being reported under 200,000 claims this week. Ho Hum. It's not like we only did this once during 2015, twice during 2016, and four times during 2017. Oh, the non-seasonally adjusted continuing claims level dropped to 1.536 million claims and the Insured Unemployment Rate dropped to 1.07%. The article "May Unemployment Data Dropping Like a Rock" explains it all,
(May 17) New Home Construction is an economic stimulus. New home construction is required for new home sales. New home starts have been slowing as new home completions have been picking up the pace. "April New Home Completions Bode Well" explains how the New Home Starts dropped from the April 2018 level, the Units Under Construction data is near an all-time high, and Completions were at their highest April level since April 2007. The April new home completions data bode well for new construction jobs, for retail sales in the Building Material and Garden Equipment Sector, the Furnishings and Furniture Sector, the Electronics and Appliance Sector, and the Employment Statistics Sectors for workers in Retail, Construction, and Professional Business Services.
All of this is connected. The stock markets were roiled when it was reported that the first quarter GDP could have dropped to 0.5% due to the Government Shutdown. The seasonally adjusted December Retail sales dropped even though the non-seasonally adjusted sales that month was the best month ever. This year we have also had the best January ever, the best February ever, the best March ever, and the best April ever for retail sales. What happens when new home construction moves to higher levels? New home sales are able to expand. When new home sales expand then retail sales can expand. When retail sales expand, more workers are required. If more workers are required then sometimes employers have to increase wages to lure workers into the workforce. When wages and workers rise disposable income rises. And the cycle continues until it doesn't.
It's the Economy.
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