Jobless Claims Persistent as Retail Sales Show Strength

The Census Bureau reported this morning that Retail Sales in June rose by a higher-than-expected 7.5% against an estimated rise of just 5%. May’s rebound growth of 17.7% was revised even higher to 18.2%. Without Autos, June’s growth was 7.3% and that also beat the estimated rise of 5%. For “core” Retail Sales (without autos, gas stations, building materials and food) last month’s increase was 5.6% versus the estimate of 4%. None of these measures were able to match May’s bounce-back from the depths of the lockdown, but still, surprisingly strong.

Also surprisingly strong was today’s report from the Philadelphia Fed showing that its Business Conditions Index for July fell less-than-expected to 24.1 from 27.5 when it was anticipated to slip to 20. Kind of good news.

And as always, Thursday morning brings the weekly jobless claims statistics from the BLS and the news was uninspiring. For the week ended July 11th Initial Claims rose by a higher-than-expected 1.3M against a forecast for 1.25M. For the week ended July 4th, Continuing Claims fell to 17.33M; lower than the prior week’s earlier reported 18.1M that was revised to 17.76M.

The strong Retail Sales report doesn’t look like it will be enough to satisfy equity investors as domestic stock markets will likely open significantly in the red. Overnight, some weak economic data out of China might have something to do with that. The ECB announced yesterday that it would be continuing its stimulative and relief efforts. Also affecting investors attitudes are the disquieting reports of rising COVID infections and deaths as various regions have had to crawdaddy on some of their reopening plans. In the meantime, Treasury prices are up a bit and that has brought the Ten-Year’s yield down a couple of basis points to around 0.61%. The long bond rests at 1.30% with gold slipping slightly to just below $41. Gold is little changed at $1,807.