It’s Friday and that means it’s time to review the latest economic data and identify which pockets of the economy are heating up and which are slowing down. Don’t worry about catching every headline and every report throughout the week–I recap all of the most important news impacting your wealth right here every Friday. Let’s take a look at this week’s big headlines:
Jobless Claims Rise More Than Expected
For the week ended February 7, jobless claims increased more than expected. Initial claims increased 25,000 to a seasonally adjusted 304,000, while economists were looking for jobless claims to only rise to 285,000. The four-week moving average slipped to 289,750. While it’s disappointing that jobless claims were back above the 300,000 threshold last week, the key takeaway is that the four-week moving average continues to slide lower and remains below the 300,000 threshold. Remember, the four-week moving average is a better measure of labor market strength.
Retail Sales Fall in January
In January, retail sales slipped 0.8%, following a 0.9% decrease in December. This missed economists’ expectations for a 0.4% decline in January. It is not unusual to see retail sales pullback a bit after the holiday shopping season, so the pullback in January isn’t too concerning. With gasoline prices lower and the labor market improving, we’ll likely see consumer spending, and in turn, retail sales, pick up in the coming months.
Wholesale Inventories Slightly Rise in December
On Tuesday, the Commerce Department reported that wholesale inventories climbed 0.1% in December after a 0.8% rise in November. This was lower than economists’ expectations for a 0.2% increase in December. At the December sales pace, it would take 1.22 months to empty shelves. This report, along with the 0.3% decline in manufacturing inventories last week, suggests that fourth-quarter restocking wasn’t as significant as previously thought, which could weigh on fourth-quarter GDP growth.
Business Stockpiles Fall Short of Projections
U.S. business inventories only increased 0.1% in December, slightly less than economists’ projections for a 0.2% rise. November business inventories remained unrevised at a 0.2% gain. At the December sales pace, it will take businesses 1.33 months to clear shelves, which is the highest inventory-to-sales ratio since July 2009. Given that inventory levels are high, it’s possible that businesses may cut back on restocking in the coming months, which could also impact GDP growth.
That’s all I have for you this week. I’ll be in touch with the latest Portfolio Grader changes on Monday.
Have a great weekend,