More mixed data out this morning. On the consumer front ICSC same store sales and Rebook sales came in fairly strong. The ICSC posted its 5th straight gain. On a weekly basis sales rose 0.1% while year over year readings showed a 2.4% increase. Redbook showed similar strength as the year over year reading rose 0.7%.
Consumer confidence readings were not so rosy and remain disturbingly low. Econoday has the details:
Consumer confidence is falling backwards as pessimism grows over the jobs market. The Conference Board’s index fell more than 5-1/2 points to 47.7 in October, barely above 47.4 seen in July. The assessment of current conditions is alarming, at 20.7 for a nearly 2-1/2 point decline and the lowest reading yet of the cycle. Job readings are very weak for the present situation with 49.6 percent, that is nearly half of the 4,000 sample, saying jobs are hard to get, that’s up more than 2-1/2 points from September. This reading contrasts with improvement underway for jobless claims and will raise questions whether payroll contraction will deepen, not improve, in October.
The expectations component also fell, down 8 points to 65.7. Here the key reading is expectations for future income where fewer see an increase, 10.3 percent vs. September’s 11.2 percent, and more see a decrease, 19.5 percent vs. 19.3 percent. These results are uncomfortably close to the worst levels for this reading in 40-plus years of data. Buying plans all decreased, down for cars, homes and appliances. Inflation expectations are unchanged at 5.3 percent one-year out.
On the housing front we saw a continued rise in home prices. The Case/Shiller data shows a 1.3% monthly increase and a 10.6% year over year decline. Of course, it’s important to note that this data is somewhat lagging as Case/Shiller is showing the August home prices. Seeing as how we are at a critical seasonal juncture, it’s important to note Mark Hanson’s excellent research from last week that showed the housing market is not actually improving, but continuing to deteriorate.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.
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