Retail sales disappointed in November, gaining only +0.2% m/m vs. expectations of +0.5%. After stripping out volatile categories, “core” retail sales, which are an input into GDP, rose only +0.1% vs. expectations of +0.4%. On a y/y basis, core sales fell from +4.0% to +3.2%. Most importantly, sales related to holiday shopping were weak; clothing -3.3% y/y; sports, books, etc. fell for the fourth time in five months; general merchandise -0.1% y/y; department stores -7.2% y/y. But non-store (mostly e-commerce) rose to a scorching +11.5% y/y. Manufacturing industrial production jumped a sharp +1.1% m/m, but the y/y rate is still -0.8%, and 13 of 19 subindustries are in contraction. Weekly jobless claims rose the most in over two years, and more importantly have risen +11% since the bottom in April, historically a sign of an impending slowdown. Housing provided a spot of good news, continuing its rebound as both starts and permits gained on the month, sending the smoothed y/y rate to +8.4% and +11.1%, respectively. It was the highest level of permits in over 12 years. Similarly the Housing Market Index leapt a sharp +5 points to 76, the highest level in over 20 years.
Authors
Dan North
