Retail Sales, Jobless Claims, Machine Tools Deliver Mixed Messages

By John S. McClenahen As expected U.S. retail sales fell in January, dropping to $306.6 billion, 0.9% lower than their December 2002 figure, the U.S. Commerce Department reported on Feb. 13. The decline was larger than the 0.6% economists generally expected. However, Maury Harris, chief U.S. economist at UBS Warburg, notes that excluding autos, retail sales posted a 1.3% gain In January. "The solid gain in core sales does suggest that consumers continue to underpin the economy, despite weaker confidence," Harris says. Meanwhile, the Labor Department's latest data on initial jobless claims are sending slightly mixed signals. For the week ending Feb. 8, initial claims for unemployment insurance fell to 377,000, a decrease of 18,000 from the previous week's revised figure of 395,000 and some 9,000 below the 386,000 total that economists generally expected for last week. That's encouraging. But the department's four-week moving average of initial job claims, which some economists consider to be a better measure of labor market trends, rose to 389,000 last week, a small increase of 3,500 from the previous week's revised average of 385,000. Finally, for the beleaguered U.S. machine tool industry, this week brought one bit of encouraging news. Gross new orders for U.S. consumption were $198.19 million in December 2002, up 45.5% from November's mark and 18.1% better than the December 2001 figure, jointly reported the American Machine Tool Distributors' Association, Rockville, Md., and AMT-The Association for Manufacturing Technology, McLean, Va. However, 2002 overall was anything but a good year for the makers of metal-forming and metal-cutting equipment. U.S. machine tool consumption last year totaled $2.06 billion, 22.8% lower than in 2001.

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