Mostly good news on the economic front today. The ICSC weekly retail sales figures came in at 0.6% week over week and -0.2% year over year. The Redbook data, however, continues to show an extremely weak U.S. consumer. All in all, the weekly gain in ICSC is nice to see, but Redbook mentions a major concern of ours – the Cash for Clunkers program is taking away from overall retail sales.
On the housing front we saw the second monthly gain in the Case Shiller data. Econoday reports:
Case-Shiller’s composite 10 index rose 1.4 percent to 153.20 with the composite 20 index also up 1.4 percent, to 141.86. This is the second month of actual gains. Year-on-year rates are showing three months of improvement, now at minus 15.1 percent for the 10 index and at minus 15.4 percent for the 20. Today’s report also includes quarter-to-quarter readings that show a 2.9 percent second-quarter increase for the first quarterly gain in three years. Prices in the existing home sales report are not confirming this improvement though this report’s methodology, which tracks specific homes, is especially rigorous. Of special note in today’s report is month-to-month gains for Miami, Phoenix, LA, San Diego and San Francisco, all cities that have been hit especially hard by the housing collapse. New home sales for July will be posted tomorrow.
Whether these gains are due to seasonal strength or true underlying fundamental strength is yet to be determined. The true test for housing will come later this Fall and Winter.
Consumer confidence also came in much better than expected at 54.1 vs expectations of 48. The conference board says expectations for future employment and business conditions have improved substantially. The recent rally in stocks is likely adding to the positive sentiment.
In other news, Bernanke was renominated. This is good for continuity, but let’s not forget that Bernanke completely missed the financial crisis during the first few years of his term. It’s great that he came in after a near 50% decline in stocks and “saved the day”, but the long-term effects of his actions will not be judged for years.