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Retail sales dip unexpectedly, jobless claims rise

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Filed: Citizen (apr) Country: Brazil
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WASHINGTON – Retail sales disappointed in July and the number of newly laid-off workers filing claims for unemployment benefits rose unexpectedly last week. The latest government reports reinforced concerns about how quickly consumers will be able to contribute to a broad economic recovery.

"There is really no positive spin to put on these numbers," Jennifer Lee, an economist with BMO Capital Markets, wrote in a research note. "The U.S. consumer remains very weak. The jobs situation, while slowly improving, is still dismal."

The Commerce Department said Thursday that retail sales fell 0.1 percent last month. Economists had expected a gain of 0.7 percent.

While autos, helped by the start of the Cash for Clunkers program, showed a 2.4 percent jump — the biggest in six months — there was widespread weakness elsewhere. Gasoline stations, department stores, electronics outlets and furniture stores all reported declines.

The July dip was the first setback following two months of modest sales gains. Excluding autos, sales fell 0.6 percent, worse than the 0.1 percent rise economists had forecast.

Households are working to pay down debt and add to savings, longer-term trends along with little job growth making it "probable that the U.S. consumer will not be much of a help during the early stages of the economic recovery," Joshua Shapiro, chief U.S. economist at consulting firm MFR Inc., wrote in a note to clients.

The Labor Department said initial claims increased to a seasonally adjusted 558,000, from 554,000 the previous week. Analysts expected new claims to drop to 545,000, according to Thomson Reuters.

The number of people remaining on the benefit rolls, meanwhile, fell to 6.2 million from 6.34 million the previous week. Analysts had expected a smaller decline. The continuing claims data lags initial claims by one week.

The four-week average of initial claims, which smooths out fluctuations, rose by 8,500 to 565,000. That reverses six straight weeks of decline.

A weak job market hurt sales last month. Gas station sales plunged 2.1 percent in July, due more to falling pump prices than weak demand. Excluding that drop, retail sales would have posted a modest 0.1 percent increase.

Department store sales fell 1.6 percent and the broader category of general merchandise stores, which includes big chains such as Wal-Mart Stores Inc. and Target Corp., posted a decline of 0.8 percent.

Wal-Mart on Thursday reported virtually flat second-quarter income compared with a year ago, but the results beat Wall Street expectations and the world's largest retailer raised the low end of its profit outlook as a series of cost-cutting moves draw frugal shoppers away from rivals.

Still, the July weakness in overall retail sales highlighted worries about the potential strength of the recovery from the recession. Consumer spending accounts for about 70 percent of total economic activity.

"Households are in no position to drive a decent economic recovery," Paul Dales, U.S. economist at Capital Economics, wrote in a note to clients.

While there have been recent signs of stability in the U.S. housing market after three years of plunging prices, record foreclosures persist. The number of U.S. households on the verge of losing their homes rose 7 percent in July, as the foreclosure crisis continued to outpace government efforts to limit the damage.

Foreclosure filings rose 32 percent from the same month last year, RealtyTrac Inc. said Thursday. More than 360,000 households, or one in every 355 homes, received a foreclosure-related notice. That's the highest monthly level since the foreclosure-listing firm began publishing the data more than four years ago.

The Federal Reserve on Wednesday delivered a more upbeat assessment of the economy. The central bank held interest rates at record lows and said it would slow the pace of an emergency rescue program to buy $300 billion worth of Treasury securities, shutting it down at the end of October, a month later than previously scheduled.

The Fed again pledged to keep a key bank lending rate near zero for "an extended period" to nurture an anticipated recovery.

Fed Chairman Ben Bernanke and his colleagues said the economy appeared to be "leveling out" — a considerable upgrade from their last meeting in June, when the Fed observed only that the economy's contraction was slowing.

On Wall Street, stocks edged up in late-morning trading Thursday. The Dow Jones industrial average gained about 10 points, while broader indices also rose.

Initial claims reflect the pace of layoffs by employers. The Labor Department last week said companies cut 247,000 jobs in July, a large amount but still the smallest number in almost a year.

The unemployment rate dipped to 9.4 percent in July from 9.5 percent, its first drop in 15 months.

There were 617,000 new jobless claims in late June, before the figures were distorted last month by a shift in the timing of temporary auto plant shutdowns. That shift caused claims to drop sharply and then jump up last month.

Claims fell steeply last week, however, when the data were no longer affected by the distortions.

Still, initial claims remain far above the roughly 325,000 that economists say is consistent with a healthy economy. New claims last fell below 300,000 in early 2007.

Including federal emergency benefit programs, 9.25 million people received unemployment compensation in the week ending July 25, the latest data available. That's down from a record of 9.35 million the previous week. Congress has added up to 53 extra weeks of benefits on top of the 26 typically provided by the states.

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Filed: K-1 Visa Country: Thailand
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As quoted directly from your news article .....

The Federal Reserve on Wednesday delivered a more upbeat assessment of the economy. The central bank held interest rates at record lows and said it would slow the pace of an emergency rescue program to buy $300 billion worth of Treasury securities, shutting it down at the end of October, a month later than previously scheduled.

The Fed again pledged to keep a key bank lending rate near zero for "an extended period" to nurture an anticipated recovery.

Fed Chairman Ben Bernanke and his colleagues said the economy appeared to be "leveling out" — a considerable upgrade from their last meeting in June, when the Fed observed only that the economy's contraction was slowing.

Trying to gauge where we are in a recovery by looking at any given report any given month is pointless.

Things are better now than they were 6 months ago. Things still suck now.

Hopefully we'll get into a recovery in 3rd/4th quarter for a V recovery. Perhaps we'll flatline in a U with recovery only in 2010.

But perhaps we'll go into a W, due to the inability to sustain a recovery -- primarily because companies are slow to rehire and consumers have no muscle.

It's really too early to tell, as the Fed themselves is noting.

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Filed: K-1 Visa Country: Philippines
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Remember whenever the economy did well under Bush it was "unexpected"? Now, whenever it does poorly (which is every day) under Obama its "unexpected". Correlation?

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Obama inherited this mess! :crying: However the 1. gazillion dollars he is spending makes no difference. Fire up them presses boys, we be needin more hope!

"I swear by my life and my love of it that I will never live for the sake of another man, nor ask another man to live for mine."- Ayn Rand

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Filed: K-1 Visa Country: Thailand
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Remember whenever the economy did well under Bush it was "unexpected"? Now, whenever it does poorly (which is every day) under Obama its "unexpected". Correlation?

Isn't selective memory a wonderful thing!

Only thing is ... whose history is revisionist, and whose is "just the facts".

Cite some sources and we'll see if you have a stool to stand on.

As I recall it, nobody was complaining about economic growth when times were good.... I don't recall the word "unexpected" being in fashion except by the permabears who were calling for the mother of all corrections (prophecy is a very lonely business....)

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Remember whenever the economy did well under Bush it was "unexpected"? Now, whenever it does poorly (which is every day) under Obama its "unexpected". Correlation?

Is that one of those things that "well-documented" if we go look up some stuff - like Rush's 98.8% accuracy rating?

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Does no one remember how Obama said many times that things were probably going to get a lot worse before they got better? He said it might take a year or it might take a whole term for things to turn around. It took us years to get ourselves into this mess. Logic would dictate that it's going to be years to get us out of it, if it can be done.

Real love stories never have endings...

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Filed: AOS (apr) Country: Colombia
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Does no one remember how Obama said many times that things were probably going to get a lot worse before they got better? He said it might take a year or it might take a whole term for things to turn around. It took us years to get ourselves into this mess. Logic would dictate that it's going to be years to get us out of it, if it can be done.

Its still going to be his fault just because to some.

Wishing you ten-fold that which you wish upon all others.

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Filed: Country: Philippines
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Remember whenever the economy did well under Bush it was "unexpected"? Now, whenever it does poorly (which is every day) under Obama its "unexpected". Correlation?

Isn't selective memory a wonderful thing!

Only thing is ... whose history is revisionist, and whose is "just the facts".

Cite some sources and we'll see if you have a stool to stand on.

As I recall it, nobody was complaining about economic growth when times were good.... I don't recall the word "unexpected" being in fashion except by the permabears who were calling for the mother of all corrections (prophecy is a very lonely business....)

;):thumbs:

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Filed: K-1 Visa Country: Thailand
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Does no one remember how Obama said many times that things were probably going to get a lot worse before they got better? He said it might take a year or it might take a whole term for things to turn around. It took us years to get ourselves into this mess. Logic would dictate that it's going to be years to get us out of it, if it can be done.

:thumbs:

I actually think that when the history of this period is written, the key actors in both the final days of the Bush administration, and the first months of the Obama administration, will be seen as heroes.

Last Sept Paulson, Bernanke, and Geitner (at the NY Fed) and Congress quite literally saved the nation and the world economy. Yes -- Hank Paulson, Bush's Treasury Secretary.

And, this year in Feb, it was again Geitner, Bernanke and Congress that have prevented this recession from turning out much, much worse than it otherwise would have been.

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