What today’s economic news tells us about the ‘recovery’
Listening to the President, his administration, some in Congress and several news reports, many would say the economy is recovering slowly but gaining traction. Seeing the economic data released today may reveal a somewhat more real reality.
The unemployment figures released this morning seem promising, but only in a vacuum. Claims dropped 24,000 to a seasonally-adjusted 297,000 for May. What the report doesn’t tell us is why fewer people filed claims. Was it because all of these folks have found gainful employment? Or are fewer people re-entering the labor market after having given up on finding a job some time ago?
Home builders are feeling less confident in a housing recovery. The latest survey of builders dropped to 45 for May and the April number has been adjusted lower. Anything below 50 is considered “negative sentiment.”
The Philadelphia Federal Reserve Bank’s business activity index dropped from 16.6 in April to 15.4 in May. New orders also saw a decline from 14.8 to 10.5 indicating that the pace of growth is slowing.
If economists’ data isn’t enough, two of the nation’s largest retailers are reporting disappointing earnings.
Wal-Mart reported the smallest sales growth in 5 years today. The report blames the harsh winter for keeping customers out of their stores, but then goes on to forecast a second quarter that will come in below analysts’ expectations.
Kohl’s reported their first quarter results today and missed – on both sales and earnings. The retailer showed a $13 million drop from the same time last year in sales and missed analysts’ expectations by $15 million.