Economic data coming in nicely

Happy Friday everyone!

Economic data continues to roll in and it is largely positive.

For example…

September Retail Sales
September retail sales showed a lot of improvement with same-store sales up 0.6%. While a modest gain, this compares to big declines for the last 13 months. That number also compares to a 0.9% decline a year ago in September.

Many retailers posted positive gains, including Limited Brands, Kohl’s, Costco, Aeropostale, BJ’s Wholesale Club, TJX (owners of TJ Maxx), and Ross Stores. With the exception of Abercrombie & Fitch, most of those retail stores with negative results were down only modestly. What’s more those stores with declining same-store numbers generally beat analyst estimates.

If you look at the list of stores that had positive gains, they were stores that sell discounted merchandise. Clearly, the consumer is still trying to conserve income. However, for retail sales to have climbed means that the consumer is feeling better about the economy.

As I have stated many times, it is very important to pay attention to the U.S. consumer as the recession winds down. It is my hope that excessive use of debt has been wrung out of the consumer consciousness, replaced by a greater proclivity to save for purchases. We shall see.

Trade Deficit
The August trade deficit declined 3.6% to $30.71 billion. This result was unexpected by Wall Street analysts, especially the rise in the U.S. exports component of the calculation. The trade deficit is a notoriously inconsistent number, though. Why? Because it includes foreign oil imports and the price of oil bounces all over the place.

However, U.S. exports are improving. This is a sign that the recession is scaring fewer people overseas, too. A good sign.

*****

I hope that all of you have an outstanding weekend!

Jason