News that 1.3 million new workers applied for unemployment benefits for the week ending July 11 was discouraging. The new numbers came in at almost the same level as the previous week’s count, just slightly below the nearly 1.38 million four-week moving average. Are we stuck in a downward spiral or what? And what about other parts of the economy? Do we find anything besides bad news when we look at major economic sectors?
Well, a hard look at the data tells us that the numbers being added to the unemployment rolls each week have fallen significantly and continuously, from the nearly 6.87 million new claims that hit on the week ending March 28. In fact, this and other data suggest that April was a turning point of sorts for the economy. It’s when the speed at which the economy was declining began to diminish.
We see this from another angle in data just reported for June retail sales, which rose 7.5% for the month, following an increase of 18.2% in May. Sales had fallen 14.7% in April. Here, the data include everything from autos to furniture to clothing and sports gear. Interestingly enough, while overall retail sales rose in June, online retail sales fell 2.4%. The data tell us not only that April marked a low point but that more folks are getting out and shopping the old-fashioned way.
What about other parts of the economy? Does the April turning point appear elsewhere? And if so, does this give reason for a bit of optimism? The answer, I believe, is yes. Housing starts, which showed a nice June surge, have almost moved into positive growth territory when measured on a year-over-year percentage change basis. But note this: the deceleration in starts that accompanied the virus recession bottomed out in April.