Economic Update – September 12, 2011

Retail sales fell 0.7% for the week ending September 3, according to the ICSC-Goldman Sachs index. On a year-over-year basis, retailers saw sales increase 2.7%.

The Institute for Supply Management reported that the monthly composite index of non-manufacturing activity rose to 53.3 in August from 52.7 in July. A reading above 50 signals expansion. It was the 21st straight month of expansion in the services sector.

The Mortgage Bankers Association said its seasonally adjusted composite index of mortgage applications for the week ending September 2 fell 4.9%. Refinancing applications decreased 6.3%. Purchase volume rose 0.2%.

The trade deficit decreased to $44.8 billion in July from a revised $51.6 billion in June. Exports rose 3.6% to $178 billion. Imports decreased 0.2% to $222.8 billion.

According to the Federal Reserve, consumer credit debt rose in July by $12 billion for a total credit level of $2.45 trillion. Revolving debt, which includes credit cards, fell by $3.4 billion. Non-revolving debt, including loans for cars, rose by $15.4 billion.

Wholesalers increased their inventories 0.8% to $462.4 billion in July. This followed a revised 0.6% rise in June. Sales at the wholesale level were little changed in July at $396.01 billion. On a year-over-year basis, sales were 15.1% higher since July 2010.

Initial claims for unemployment benefits rose by 2,000 to 414,000 for the week ending September 3. Continuing claims for the week ending August 27 fell by 30,000 to 3.7 million.

Last Week in the News

Initial claims for unemployment benefits fell by 36,000 to 383,000 for the week ending February 5, the lowest level since early July 2008. Continuing claims for the week ending January 29 fell by 47,000 to 3.88 million.

Retail sales rose 2.2% for the week ending February 5, according to the ICSC-Goldman Sachs index. On a year-over-year basis, retailers saw sales increase 2.5%.

Wholesalers increased their inventories 1% in December, following a 0.2% drop in November. Sales at the wholesale level rose 0.4% in December after a 1.9% increase in November.

The trade deficit increased 5.9% to $40.58 billion in December from $38.32 billion in November. Economists had expected a trade deficit of $40.5 billion. Exports rose 1.8% to $162.96 billion. Imports increased 2.6% to $203.55 billion.

The Reuters/University of Michigan consumer sentiment index for February’s preliminary reading rose to 75.1 from 74.2 in January. It was the highest level since June 2010. The index hit a 30-year low of 55.3 in November 2008.

The Mortgage Bankers Association said its seasonally adjusted composite index of mortgage applications for the week ending February 4 fell 5.5%. Refinancing applications decreased 7.7%. Purchase volume fell 1.4%.

According to the Federal Reserve, consumer credit debt rose in December by $6.1 billion, or 3%, for a total credit level of $2.41 trillion. Revolving debt, which includes credit cards, increased by $2.3 billion, or 3.5%. Non-revolving debt, including loans for cars, rose by $3.8 billion, or 2.8%.

Upcoming on the economic calendar are reports on the housing market index on February 15, housing starts on February 16 and the index of leading economic indicators on February 17.