US retail sales showed its first improvement in January after six consecutive monthly declines. Retail sales rose by 1.0% M/M, while the consensus was looking for a drop by 0.8% M/M. The December figure was downwardly revised from -2.7% M/M to -3.0% M/M. Looking at the breakdown, the rebound is wide-spread with a significant rise in: motor vehicles and parts (1.6% M/M from -2.0% M/M), despite decline in unit car sales, electronics (2.6% M/M from -5.8% M/M), food and beverages (2.1% M/M from -2.3% M/M), gasoline stations (2.6% M/M from -15.6% M/M), clothing (1.6% M/M from -4.0% M/M) and non-store retailers (2.7% M/M from -1.2% M/M). On the other hand, building materials and furniture weakened further. Although the increase in retail sales is broad based, it is too early to conclude that households are increasing their spending as it might be just a correction after the sharp declines in the previous three months, driven by discounting. Nevertheless, the report sets up a somewhat more positive tone for Q1 2009 consumption.
In the week ended February 7, initial claims dropped by 8 000 to 623 000, while the consensus was looking for a figure of 610 000. The previous outcome was upwardly revised from 626 000 to 631 000 and the 4-week average is now above 600 000 for the first time. Continuing claims, which are reported with a one-week lag, rose from an upwardly revised 4 799 000 to 4 810 000, which is yet again a new record high. Part of the rise was due to the massive automotive shutdowns. The report suggests ongoing really ugly conditions in the labour market.
EMU: Broad based weakness in industrial production
In December, euro zone industrial production came out broadly in line with expectations. On a monthly basis, industrial production fell by 2.6% M/M, while the consensus was looking for an outcome of -2.5% M/M. The previous figure was sharply downwardly revised from -1.6% M/M to -2.2% M/M. Looking at the details, intermediate goods dropped sharply (-5.7% M/M from -3.6% M/M) but also capital goods and durable consumer goods declined significantly. Energy showed its first monthly increase since August. Due to the downward revision in the November figures, industrial production plunged by 12.0% Y/Y, the biggest annual drop since the start of the series in 1986, but the data don’t bring much new info as they are in line with national data and with the timelier business surveys.
