Oh Wait, Maybe the Recession Isn’t Over After All
CNBC reports with apparent surprise:
Sales at U.S. retailers unexpectedly fell in July and the number of workers filing new claims for jobless benefits rose last week, indicating the recession-hit economy faced a bumpy recovery.
A Commerce Department report Thursday showed total retail sales edged down 0.1 percent after increasing 0.8 percent in June, compared with market forecasts for a 0.7 percent gain.
Analysts had expected a boost in retail sales from the government’s “cash for clunkers” program, which gives consumers cash to swap aging gas-guzzlers for new, more fuel efficient models.
A separate report from the Labor Department showed first-time applications for state unemployment insurance benefits climbed 4,000 to a seasonally adjusted 558,000 last week.
“Retail sales were unexpectedly weaker than expected, suggesting that the money spent on the ‘Cash for Clunkers’ plan wasn’t spent on other things,” said Peter Boockvar, equity strategist at Miller Tabak & Co in New York.
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There was more bad news on the home foreclosures front, where RealtyTrac reported that U.S. home loans failed at a record pace in July despite ongoing federal and state programs to avoid foreclosures.Foreclosure activity jumped 7 percent in July from June and 32 percent from a year earlier as one in every 355 households with a loan got a foreclosure filing, RealtyTrac said.
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Consumer spending fell at a 1.2 percent annual rate in the second quarter after edging up 0.6 percent in the January-March period. Despite signs the worst recession in over 60 years was winding down, companies have been reluctant to hire, though the pace of layoffs has slowed down markedly.
I think we just need to give it another month, and then Obama and Krugman will go back to explaining that the stimulus money hasn’t hit yet (and was too small anyway) to get us out of the recession.
