Retail Sales Slip in May, But the Economy Has Other Problems

WASHINGTON — A measure of U.S. home prices jumped 5 percent in September compared with a year ago, the largest year-over-year increase since July 2006. The gain reported by CoreLogic offered more evidence of a sustainable housing recovery. The real estate data provider also said Tuesday that prices declined 0.3 percent in September from August, the first drop after six straight increases. The monthly figures are not seasonally adjusted. CoreLogic says the monthly decline reflects the end of the summer home-buying season and not a softening in the housing recovery.

James Picerno submits: Retail sales jumped 1% on a seasonally adjusted basis last month, the Census Bureau reports. That’s the best monthly gain since last October’s 1.6% surge. It’s also the eighth straight monthly increase. Consumption, in other words, is doing fine. But quite a bit has changed on the global stage in recent weeks, namely, the Mideast turmoil and resulting jump in oil prices. The question is whether February data is dated?

The December trade figures were released today. The trade deficit widened a bit, largely in line with the Bloomberg consensus, but a little less than assumed by BEA statisticians. This outcome meant a likely revision upward to 2010Q4 GDP.

WASHINGTON — U.S. producer prices recorded their largest drop in three years in April as gasoline and food costs tumbled, pointing to weak inflation pressures that should give the Federal Reserve latitude to keep monetary policy very accommodative. The Labor Department said on Wednesday its seasonally adjusted producer price index fell 0.7% last month, the biggest decline since February 2010. Wholesale prices had dropped 0.6% in March.

WASHINGTON — The number of Americans filing new claims for unemployment benefits dropped for a third straight week last week, the latest indication the labor market recovery was gaining traction. Other data on Thursday showed a spike in the cost of gasoline pushed up producer prices last month, but the lack of broad price pressures gives the Federal Reserve scope to maintain its very accommodative monetary policy stance even as the job market strengthens.

The Case-Shiller Home Price Index is unique among other economic data indicators for recommending that analysts focus solely on its Non-seasonal adjusted data series, as this is what the report uses in its own headline figures.

By James Picerno: Retail sales beat expectations with a moderately strong 0.5% rise in December (seasonally adjusted), the Census Bureau reports. After stripping out gasoline sales, retail purchases rose even more, advancing 0.8% for the month.

ADP has announced revised methodology to "enhance" its monthly job reports, no doubt because its prior numbers simply were grossly inaccurate. Indeed, I stopped commenting on ADP numbers because I thought they were absurd. Let's take a look at their revised methodology. Here is the ADP Jobs Report for September using the revised methodology.