Signs that the Economy is Starting to Sputter Back to Life

I thought I would share some more positive signs of hope for our economy.  These tidbits are from our economic friends at Goldman Sachs& Company.

Retail sales for February were very strong. While the headline number fell 0.1%, due to a drop in auto sales, core retail sales (ex-autos) rose 0.7%. In addition, January sales were revised up by 0.5%. Even more positive is that increases were broad based across subcomponents. This raises some upside risk to our Q1 forecasts for flat consumption and GDP growth of -7%.

Initial jobless claims moved back up this week to 654k from 645k. Continuing claims continued their relentless march higher, moving from 5.1mm to 5.3mm.

The nominal trade balance narrowed in January to -$36.0bn from -$38.0bn. The primary driver was oil (both a drop in prices and volume); outside of petroleum the nominal balance was basically unchanged. On the other hand, the real trade balance widened to -$44.0bn from -$42.9bn. This report is consistent with our expectation that foreign trade will be a drag on GDP growth to the tune of 0.3%-0.4%.

The Reuters/University of Michigan Consumer sentiment index ticked up to 56.6 from 56.3 in March. Expectations for the future rose 2.5 pts, meaning that while confidence remains depressed, pessimism is not getting worse and may be receding. The current conditions component fell over 3 pts, reflective of the current severe contraction of the labor market.