by Calculated Risk on 9/15/2012 08:07:00 AM
Saturday, September 15, 2012
Summary for Week Ending Sept 14th
The key event of the week was the FOMC announcement. Here were my posts:
• FOMC Statement: QE3 $40 Billion per Month, Extend Guidance to mid-2015
• FOMC Projections and Bernanke Press Conference
• Analysis: Bernanke Delivered
In other news, retail sales were strong due to higher gasoline prices. From Merrill Lynch:
Gasoline prices surged in the month, forcing consumers to spend more at the pump. Gasoline station sales climbed 5.5%, contributing to the majority of the gain in total sales. Netting out gasoline station sales, spending was only up 0.3%. ...Some of the other data was impacted by hurricane Isaac: Industrial production declined although this was partially due to the impact of Hurricane Isaac and weekly unemployment claims increased - also partially blamed on the hurricane.
Outside of gasoline, autos and building materials, core control sales fell 0.1%. This was a decidedly weak report, showing a pullback in consumer spending. ...
The combination of weak August core retail sales and a downward revision to July and June (0.1pp in each month), slices 0.4pp from our Q3 GDP tracking model. We are now looking for GDP growth of only 1.1% in Q3.
In a little good news, consumer sentiment increased some in September.
Overall this suggests more sluggish growth.
Here is a summary of last week in graphs:
• Retail Sales increased 0.9% in August
![Retail Sales](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi1URoB2iXUhQDEx1qDqqssXHrt2aLCdsLJTeJNGYoFkOnc3rr29elTVmICGmiAW0deTI9USdBLGIupMQvnFIM5QGqbZ_Dq5aT9jaFx92sf6KvTptd4cpItHMHPzbszyzDYaYI4/s320/RetailAug2012.jpg)
On a monthly basis, retail sales were up 0.9% from July to August (seasonally adjusted), and sales were up 4.7% from August 2011. This increase was largely due to higher gasoline prices.
Sales for July were revised down to a 0.6% increase (from 0.8% increase).
This graph shows retail sales since 1992. This is monthly retail sales and food service, seasonally adjusted (total and ex-gasoline).
Retail sales are up 22.7% from the bottom, and now 7.3% above the pre-recession peak (not inflation adjusted)
This was above the consensus forecast for retail sales of a 0.8% increase in August, and above (edit) the consensus for a 0.7% increase ex-auto.
• Trade Deficit at $42.0 Billion in July
![U.S. Trade Exports Imports](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjxNwYAwWg_QqgS9OeyXvdvbx4bsB87GVz8jGvQ_7Eg5LheJqDAcL6oflXhKtZtXXqio2Vpdt9QUEJUFjBJoFRGuCQgrsYSIUI2W6pNyuj3PdztaRwLqhnNHSf0Sp5eoA8SxBsD/s320/TradeJuly2012.jpg)
The trade deficit was below the consensus forecast of $44.3 billion.
This graph shows the monthly U.S. exports and imports in dollars through July 2012.
Exports are 10% above the pre-recession peak and up 3% compared to July 2011; imports are just below the pre-recession peak, and up about 1% compared to July 2011.
The second graph shows the U.S. trade deficit, with and without petroleum, through July.
• Industrial Production declined 1.2% in August, Capacity Utilization decreased
![Capacity Utilization](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhuHoF41BIfTPXAa6t4p4AeYNNLAyYzWnklI9Nl0K7_dlwtR8iIgVoaZ0kh_Vy2k83N6PUgdpDVcuUmKzKrX7gDUVZZZ8g7KSRR0sD4EU6YeSnXXU0J5vDV8g5vsqhWGeX5s7qg/s320/CapUtilAug2012.jpg)
Capacity utilization at 78.2% is still 2.1 percentage points below its average from 1972 to 2010 and below the pre-recession level of 80.6% in December 2007.
Note: y-axis doesn't start at zero to better show the change.
![Industrial Production](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg2Jk-3jj_MFgyA1mXiaJASBbIlHMVlMu6o2TADVM_CqoBTvWn_Cy9P-ptVTEpG7NbqV4JXa27oXI4gkZAcB1dYs4SnfV9DCfwX5PWF8XKJIvD2fFn636nc_HnPtZ97XPbw_uNt/s320/IPAug2012.jpg)
Industrial production decreased in August to 96.8. This is 16% above the recession low, but still 3.9% below the pre-recession peak.
The consensus was for Industrial Production to decrease 0.1% in August, and for Capacity Utilization to decline to 79.2%. Both IP and Capacity Utilization were below expectations.
• Consumer Sentiment increases in September to 79.2
![Consumer Sentiment](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg3arTDdscdJODnEFhbiCJelrpCA5XsBX4LCckhSPjbAUD5RFsCzaG6kLKSv7j3uQCJr7UhkXKpZfmvILV-P589uD10-ld0aQwdQShEt3TqAKrrWtKMtL9iH3FT9BzEGyRzbW_U/s320/ConsumerSentSept2012.jpg)
This was above the consensus forecast of 73.5 but still fairly low. Sentiment remains weak due to the high unemployment rate, sluggish economy and higher gasoline prices.
• Weekly Initial Unemployment Claims increase to 382,000
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhPPKhOgrGleiNUyB9vFY8Ux4CzN3kLgUXjonsMnwzXqlghnyzpO8L3rtWIBNQsls4laGdYde5b64UqljB3ldaWZyybRdEYwe4TxI0FoNz_Ms5jNjdLjGgW6Mb5AhrbTMI_M_tN/s320/WeeklyClaimsLongSep132012.jpg)
This was above the consensus forecast of 370,000.
Via MarketWatch: "The government said about 9,000 claims stemmed from the storm that passed through the Gulf Coast in late August."
The 4-week average of unemployment claims has mostly moved sideways this year.
• BLS: Job Openings "little changed" in July
![Job Openings and Labor Turnover Survey](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgxUUi1GTShBl8Fa-dDZAnqt1UAGLiZFO29l2zDww9toyngrUU0L8A5rBH_m9O4iSBmjvvtTFvjEIONv6Uubxtc9FQFhqX7rhk7lR6xup1f8LTbWTd4-FCZCyZ_wMbR6_A81_hQ/s320/JOLTSJuly2012.jpg)
Jobs openings decreased in July to 3.664 million, down from 3.722 million in June. The number of job openings (yellow) has generally been trending up, and openings are up about 9% year-over-year compared to July 2011.
Quits increased slightly in July, and quits are up about 8% year-over-year. These are voluntary separations and more quits might indicate some improvement in the labor market. (see light blue columns at bottom of graph for trend for "quits").
• Other Economic Stories ...
• Key Measures show slowing inflation in August
• Lawler: Where has the increase in the number of renters of Single Family homes come from?
• CoreLogic: Negative Equity Decreases in Q2 2012
• Lawler: Preliminary Table of Short Sales and Foreclosures for Selected Cities in August