by Calculated Risk on 1/14/2012 08:15:00 AM

The economic data last week was mostly disappointing. Retail sales for December were weak, the November trade deficit was larger than expected, and initial weekly unemployment claims increased sharply. The good news was consumer sentiment and small business confidence increased.

This data suggests the US economy grew in Q4, but at a slightly slower pace than previously expected. As an example, Goldman Sachs lowered their Q4 GDP estimate to 3.2%, and Merrill Lynch lowered their Q4 estimate to 3.0% from 3.3%.

Here is a summary in graphs:

• Retail Sales increased 0.1% in December

On a monthly basis, retail sales were up 0.1% from November to December (seasonally adjusted, after revisions), and sales were up 6.5% from December 2010. Sales for November were revised up from a 0.2% increase to 0.4%. Retail sales excluding autos decreased 0.2% in December.

Click on graph for larger image.

This graph shows retail sales since 1992. This is monthly retail sales and food service, seasonally adjusted (total and ex-gasoline).

Retail sales are up 20.4% from the bottom, and now 5.9% above the pre-recession peak (not inflation adjusted)

This was well below the consensus forecast for retail sales of a 0.4% increase in December, and a 0.4% increase ex-auto.

All current retail sales graphs
• Trade Deficit increased in November to $47.8 Billion

The Department of Commerce reports:

[T]otal November exports of $177.8 billion and imports of $225.6 billion resulted in a goods and services deficit of $47.8 billion, up from $43.3 billion in October, revised. November exports were $1.5 billion less than October exports of $179.4 billion. November imports were $2.9 billion more than October imports of $222.6 billion.

This graph shows the monthly U.S. exports and imports in dollars through November 2011.

Exports decreased and imports increased in November. Imports had been mostly moving sideways for the past six months (seasonally adjusted). Exports are well above the pre-recession peak and up 10% compared to November 2010; imports are up about 13% compared to November 2010.

The trade deficit was above the consensus forecast of $45.0 billion.

• Weekly Initial Unemployment Claims increased to 399,000

The following graph shows the 4-week moving average of weekly claims since January 2000.

The DOL reports:

In the week ending January 7, the advance figure for seasonally adjusted initial claims was 399,000, an increase of 24,000 from the previous week's revised figure of 375,000. The 4-week moving average was 381,750, an increase of 7,750 from the previous week's revised average of 374,000.

The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims increased this week to 381,750.

The 4-week moving average is still well below 400,000.
All current Employment Graphs
• Consumer Sentiment increases in January

The preliminary January Reuters / University of Michigan consumer sentiment index increased to 74.0, up from the December reading of 69.9.

Most of the recent sharp decline was event due to the debt ceiling debate, and sentiment has rebounded as expected. Now it is all about jobs, wages - and gasoline prices.

Sentiment is still fairly weak, although above the consensus forecast of 71.5.

• BLS: Job Openings "unchanged" in November

This graph shows job openings (yellow line), hires (dark blue), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS.

Jobs openings declined slightly in November, but the number of job openings (yellow) has generally been trending up, and are up about 7% year-over-year compared to November 2010.

Quits increased in November, and have mostly been trending up - and quits are now up about 12% year-over-year. These are voluntary separations and more quits might indicate some improvement in the labor market. (see light blue columns at bottom of graph for trend for "quits").
All current employment graphs
• CoreLogic: House Price Index declined 1.4% in November

From CoreLogic: CoreLogic® November Home Price Index Shows Fourth Consecutive Monthly Decline

This graph shows the national CoreLogic HPI data since 1976. January 2000 = 100.

The index was down 1.4% in November, and is down 4.3% over the last year.

The index is off 32.8% from the peak - and up just 1.2% from the March 2011 low.

Some of this decrease is seasonal (the CoreLogic index is NSA). Month-to-month prices changes will probably remain negative through March 2012 and it is likely that there will be new post-bubble low for this index in the next month or two.
All House Price Graphs
• NFIB: Small Business Optimism Index increased in December

From the National Federation of Independent Business (NFIB): Small Business Confidence Inches Upward: While Economic Winter Continues, It Appears to be Getting Warmer

This graph shows the small business optimism index since 1986. The index increased to 93.8 in December from 92.0 in November. This is the fourth increase in a row after declining for six consecutive months.

• Reis: Regional Mall Vacancy Rate declines slightly

From the WSJ: For Malls, Occupancy Firms Up

Malls in the top 80 U.S. markets posted an average vacancy rate of 9.2% in the quarter, down from the 11-year high of 9.4% in the third quarter, according to Reis, which began tracking [regional] mall data in 2000. ... vacancy [for strip malls] remained at 11% ...

Retail landlords also have been helped by a virtual shutdown in new store construction, meaning they face less competition for tenants. Only 4.5 million square feet of shopping-center space opened in 2010, the lowest figure in 31 years, according to Reis. Last year was slightly higher, with only 4.9 million square feet being delivered.

The vacancy rate for regional malls is just below the record set last quarter, and the vacancy rate for strip malls is just below the record set in 1990. It is still very ugly for malls ... but the good news is new construction is at very low levels.

• Other Economic Stories ...
• Ceridian-UCLA: Diesel Fuel index increased 0.2% in December
• RealtyTrac: Bank seizures of homes fell to four year low in 2011 due to process issues
• Fed's Beige Book: Economic activity increased at "modest to moderate" pace
• Fiscal Policy: Kind of a Drag