- Weekly: **Unemployment Initial Claims Data have been revised**
- US: Housing Starts by State and Region (Feb)
- CPB World Trade Monitor (Jan)
- CPB World Trade Monitor (Jan)
- France: Registered Unemployed & Job Vacancies (Feb)
- US: Household Employment for States and Regions (Feb)
- US: Wholesale Trade Revisions, Advance Durable Goods (Feb)
- Manufacturing Survey - Markit US (Flash - Mar), Composite Survey - US (Flash - Mar), Services Survey - US (Flash - Mar)
- more updates...
Economy in Brief
Correction to Unemployment Insurance Weekly Claims
The Department of Labor has issued a correction to yesterday's annual revision to seasonally adjusted weekly unemployment claims...
EMU PMIs Are Off to the Races...Farewell Mediocrity?
The PMI rankings for the manufacturing and service sector PMIs in the EMU are suddenly off the chart...
U.S. New Home Sales Improve While Prices Decline
Sales of new single-family homes increased 6.1% (12.8% y/y) during February to 592,000 units (AR)...
Kansas City Federal Reserve Factory Index Strengthens; Expectations Surge
The Kansas City Fed reported that its index of regional manufacturing sector business activity increased to 20 during March...
U.S. Initial Unemployment Insurance Claims Rise
Initial claims for unemployment insurance increased to 258,000 (-3.0% y/y) during the week ended March 18...
U.K. Retail Looks Less Bulletproof
For the most part, the assessments embodied in the March survey from the UK's CBI are being taken as being upbeat...
by Robert Brusca May 26, 2016
Recent Italian data have been backtracking...big time. Today's retail sales report shows that nominal sales fell by 0.6% in March with real retail sales down by 0.8%. This is the first drop in real retail sales in five months; although in two of the last five months, sales were flat. To put another way, there have only been four month-to-month real sales gains reported in the last 11 months.
Widespread slowing in retailing
Growth trends show pronounced weakness in sequential retail sales over the last three-month, six-month and 12-month. On all those horizons, real and nominal sales are falling as are food, beverages & tobacco and clothing & furniture (the latter category is a minor exception with a gain over 12-month). Real and nominal sales in addition to falling also are decelerating on these horizons.
Q1 is weak and mixed
In the just-completed first quarter (Qtr to Date), nominal ex-auto sales are slightly lower while real sales are showing slight growth. Nothing is `strong' or `firm.'
Both Italy and EMU show weakness in retailing
However, Italy's story is not just about weak sales. In the chart, we can see that the weakness in Italian sales has been mirrored by weakening sales in all of the EMU- its surrounding environment. And Italy also has weakness in many other areas.
Many Italian gauges flash weakening signals
Yesterday a rash of reports put Italy's economy in a poor light. Italy reported a drop in domestic industrial orders in March and a large drop in foreign-sourced industrial orders. Imports fell by 2.4% in March and exports fell by 1.5%. For Italy a variety of measures show economic weakness and show that weakness is spreading.
Other indicators show a breadth of slowing trends as well
Turning to the sequential growth picture from 12-month to six-month to three-month, we find that Italian domestic sourced orders still are growing steadily despite their setback in March. But foreign-sourced orders are declining and contracting at an alarmingly fast accelerating pace. Imports, too, show an acceleration in their sequential pace of decline, but a milder slowdown is in train there. Weak imports are often a sign of weak domestic demand. To that extent, weak imports dovetail with the weakness reported for retail sales. Italian exports do not show consistent deceleration over these periods, but exports are falling on all horizons and the pace of contraction has stepped up over three-month compared to six-month. In short, there is no good news here, only bad news and worse news.
Indicator weakness in the quarter-to-date with mixed signals for manufacturing
In the quarter-to-date, all these indicators are showing drops. Italy is clearly experiencing rather broad weakness. Italian consumer confidence has peaked and is now eroding off peak. Industrial production in Italy shows a decline for IP in all three sectors in March: consumer goods, capital goods and intermediate goods. But sequential growth rates show some strength except for consumer goods output. And contrarily manufacturing output sill posts a very solid 3.8% rate of growth in the just completed first quarter.
Summing up the bad news
Italy is showing widespread weakness not just weakness in retailing- but the weakness in retailing and involving the consumer is echoed in many different reports. Meanwhile, factory sector weakness is encroaching underpinned by weak trade and indicators of weaker domestic demand (weak imports) and slipping consumer confidence. The weakening trend for EMU retailing is not an encouraging statement about the broader environment either. In the EMU, both money and credit growth have failed to ignite in the face of greater ECB stimulus; both money and credit growth still are slowing. Negative interest rates are putting more pressure on banks. Earlier this week, we showed that the EMU-wide PMI data were much weaker for the EMU than for its two largest economies, Germany and France. Today's tour through Italian trends reveals Italy as one of those countries still bearing the brunt of weakness in the EMU. Germany is doing well and that always helps to dress up the EMU-wide-reported data. But there is still a lot of weakness in the EMU outside Germany. The Italian data trends are a testament to how a relatively large economy in the EMU can continue to struggle even when given the joint tail winds of ECB stimulus and a weak euro exchange rate. Italy's problems seem to be entrenched and worsening.