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By HaleStewart November 19, 2017 7:51 am
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US Economic Week in Review: The Economy Is Humming Along Nicely

            The good news for the U.S. is that its economy continues to expand at a strong rate.  This week, two coincident indicators – retail sales and industrial production – were released.  Both grew strongly.  After hurricane caused spikes, initial unemployment claims have returned to previously low levels.  While the financial markets were mixed, they remain at high levels, indicating investors have confidence in the next 3-6 months of economic growth.

            The Census Bureau released the latest retail sales numbers on Wednesday.  The data showed some lagging hurricane effects but an overall trend of continued increases:

The top two charts show five years of total retail sales (on the upper left) and the Y/Y percentage change in this number (on upper right).  The total number is rising consistently while its Y/Y percentage change is between 2% and 5%.  The bottom two charts show the ex-auto sales number (left) and its Y/Y percentage change (right).  As with the total number, the ex-auto number has continually risen for the last 5 years (lower left) while its Y/Y percentage change has been reported in a wider range – between 1% and 5%.  August contained a pronounced hurricane effect in the auto sales number; they rose 4.6% in August but slowed to 1.7% in October.  Building materials were up 1.2% in the latest report, which is also probably a result of people rebuilding their houses and businesses after the storms. 

            Industrial production was the second coincident indicator released this week.  It increased strong .9%.  This continued this data series’ strong performance throughout 2017:

The Fed breaks this data into two groups.  All the major market groups advanced: final products rose .7%, non-industrial supplies were up .5% and materials were 1.3% higher.  Two of the major industry groups expanded: manufacturing rose a strong 1.3% while utilities advanced 2%.  Mining, however, contracted 1.3%.  But this was most likely the result of Hurricane Harvey, which sidelined most gulf production.

            Initial Claims – which are a good leading indicator of the labor market – rose 10,000 to 249,000.  But the 4-week moving average as returned to very low levels.  Most importantly, Texas and Florida initial claims have both returned to pre-hurricane levels:

 

Next week is a holiday-shortened week with a very light flow of data.

In 2009, F. Hale Stewart, JD. LL.M. graduated magna cum laude from Thomas Jefferson School of Law’s LLM Program.  He is the author of three books: U.S. Captive Insurance LawCaptive Insurance in Plain English and The Lifetime Income Security Solution.  He also provides commentary to the Tax Analysts News Service, as well as economic analysis to TLRAnalytics and the Bonddad Blog.  He is also an investment adviser with Thompson Creek Wealth Advisors. 

 

 

 

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