It’s a holiday shortened week, but there was a lot of data on tap today. Consumer confidence came in much lower than expected at 49.3 versus expectations of 57. This decline represents the schism between the green shoots theorists and the real economy. Consumers simply aren’t recovering as high gas prices persist, wage deflation sets in and job losses mount.
Meanwhile, the last week of June showed some retail sales strength. The ICSC retail sales figure came in at 1.6% week over week and 0.6% year over year. Unfortunately, the month of June was a disaster so it’s too little too late. The report said:
“This late June spark was a welcome sign for the industry and the economy, however, for the month as a whole, June sales continue to track for a ‘tough’ month with the early part of the month weighing heavy on its performance.”
The Redbook data is also showing trouble on the consumer sales side after another 4%+ reading this week.
Things continue to moderate on the housing front. The Case/Shiller 10 index showed a slightly lower reading of 150.34. This is an 18% decline from last year’s prices. Although the price declines are moderating it’s still difficult to twist this in a positive light. An 18% year over year decline in the consumer’s largest asset is extremely bad no matter how many green shoots you might be seeing.
The Chicago PMI came in essentially in-line at 39.9 and the market barely budged. This is yet another very weak reading, but widely expected after the recent ISM numbers. All in all, I’d say the data bodes poorly for anyone who still believes in a v-shaped recovery.
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.