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Meanwhile, Back In The Real Economy.................

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Business Inventories Fall More Than Expected, Down 1.1%

Published: Thursday, 13 Aug 2009 | 10:05 AM ET Text Size By: Reuters

U.S. business inventories fell by a slightly bigger-than-expected 1.1 percent in June, Commerce Department data showed on Thursday, as companies continued to reduce merchandise amid weak demand.

Economists polled by Reuters had expected a 0.9 percent decline, after a 1.2 percent fall in May that was initially reported as a 1 percent drop.

Motor vehicles and parts inventories fell 2.8 percent in June after declining 4.4 percent in May.

Business sales rose 0.9 percent in June, advancing for the first time since July last year. Sales were flat in May and were down 18 percent from June last year.

The jump in sales pushed the inventory-to-sales-ratio, which measures how long it would take to clear shelves at the current sales pace, to 1.38 months' worth from 1.41 in May.

Compared to June last year, business inventories were down 9.8 percent, the department said.

Earlier this week, department data showed U.S. wholesale inventories fell 1.7 percent in June. Analysts said this suggested second-quarter gross domestic product would be revised to show a decline slightly bigger than the 1 percent annual rate reported last month.

http://www.cnbc.com/id/32401888

Check out the red bit. <_<

Edited by MOP

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Retail sales dip unexpectedly, jobless claims rise

Unexpected drop in July retail sales, rise in new jobless claims point to strained recovery

By Christopher S. Rugaber, AP Economics Writer

On Thursday August 13, 2009, 12:18 pm EDT

WASHINGTON (AP) -- Retail sales disappointed in July and the number of newly laid-off workers filing claims for unemployment benefits rose unexpectedly last week. The latest government reports reinforced concerns about how quickly consumers will be able to contribute to a broad economic recovery.

"There is really no positive spin to put on these numbers," Jennifer Lee, an economist with BMO Capital Markets, wrote in a research note. "The U.S. consumer remains very weak. The jobs situation, while slowly improving, is still dismal."

The Commerce Department said Thursday that retail sales fell 0.1 percent last month. Economists had expected a gain of 0.7 percent.

While autos, helped by the start of the Cash for Clunkers program, showed a 2.4 percent jump -- the biggest in six months -- there was widespread weakness elsewhere. Gasoline stations, department stores, electronics outlets and furniture stores all reported declines.

Some of Europe's largest economies also benefited from government programs to support the auto industry. Germany and France returned to economic growth in the second quarter, raising hopes the recession in the 16-country euro area may end sooner than thought. Europe's two biggest economies each grew 0.3 percent from the previous three-month period, surprising analysts and technically ending their worst recession in decades.

The July dip in U.S. retail sales was the first setback following two months of modest gains. Excluding autos, sales fell 0.6 percent, worse than the 0.1 percent rise economists had forecast. And excluding both auto and gas purchases, retail sales fell 0.4 percent -- the fifth straight monthly decline.

Households are working to pay down debt and add to savings, longer-term trends along with little job growth making it "probable that the U.S. consumer will not be much of a help during the early stages of the economic recovery," Joshua Shapiro, chief U.S. economist at consulting firm MFR Inc., wrote in a note to clients.

The Labor Department said initial claims increased to a seasonally adjusted 558,000, from 554,000 the previous week. Analysts expected new claims to drop to 545,000, according to Thomson Reuters.

The number of people remaining on the benefit rolls, meanwhile, fell to 6.2 million from 6.34 million the previous week. Analysts had expected a smaller decline. The continuing claims data lags initial claims by one week.

The four-week average of initial claims, which smooths out fluctuations, rose by 8,500 to 565,000. That reverses six straight weeks of decline.

A weak job market hurt sales last month. Gas station sales plunged 2.1 percent in July, due more to falling pump prices than weak demand. Excluding that drop, retail sales would have posted a modest 0.1 percent increase.

Department store sales fell 1.6 percent and the broader category of general merchandise stores, which includes big chains such as Wal-Mart Stores Inc. and Target Corp., posted a decline of 0.8 percent.

Wal-Mart on Thursday reported virtually flat second-quarter income compared with a year ago, but the results beat Wall Street expectations and the world's largest retailer raised the low end of its profit outlook as a series of cost-cutting moves draw frugal shoppers away from rivals.

Still, the July weakness in overall retail sales highlighted worries about the potential strength of the recovery from the recession. Consumer spending accounts for about 70 percent of total economic activity.

"Households are in no position to drive a decent economic recovery," Paul Dales, U.S. economist at Capital Economics, wrote in a note to clients.

While there have been recent signs of stability in the U.S. housing market after three years of plunging prices, record foreclosures persist. The number of U.S. households on the verge of losing their homes rose 7 percent in July, as the foreclosure crisis continued to outpace government efforts to limit the damage.

Foreclosure filings rose 32 percent from the same month last year, RealtyTrac Inc. said Thursday. More than 360,000 households, or one in every 355 homes, received a foreclosure-related notice. That's the highest monthly level since the foreclosure-listing firm began publishing the data more than four years ago.

The Federal Reserve on Wednesday delivered a more upbeat assessment of the economy. The central bank held interest rates at record lows and said it would slow the pace of an emergency rescue program to buy $300 billion worth of Treasury securities, shutting it down at the end of October, a month later than previously scheduled.

The Fed again pledged to keep a key bank lending rate near zero for "an extended period" to nurture an anticipated recovery.

Fed Chairman Ben Bernanke and his colleagues said the economy appeared to be "leveling out" -- a considerable upgrade from their last meeting in June, when the Fed observed only that the economy's contraction was slowing.

On Wall Street, stocks edged up in afternoon trading Thursday. The Dow Jones industrial average gained about 15 points, while broader indices also rose.

Initial claims reflect the pace of layoffs by employers. The Labor Department last week said companies cut 247,000 jobs in July, a large amount but still the smallest number in almost a year.

The unemployment rate dipped to 9.4 percent in July from 9.5 percent, its first drop in 15 months.

There were 617,000 new jobless claims in late June, before the figures were distorted last month by a shift in the timing of temporary auto plant shutdowns. That shift caused claims to drop sharply and then jump up last month.

Claims fell steeply last week, however, when the data were no longer affected by the distortions.

Still, initial claims remain far above the roughly 325,000 that economists say is consistent with a healthy economy. New claims last fell below 300,000 in early 2007.

Including federal emergency benefit programs, 9.25 million people received unemployment compensation in the week ending July 25, the latest data available. That's down from a record of 9.35 million the previous week. Congress has added up to 53 extra weeks of benefits on top of the 26 typically provided by the states

http://finance.yahoo.com/news/Fed-says-eco...ml?x=0&.v=7

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yet GDP is going to go up.

or down.

GDP will get a nice big bump from the government spending part of the equation, while the real economy continues to go down in flames.

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GDP will get a nice big bump from the government spending part of the equation, while the real economy continues to go down in flames.

so it will be down, but up in reality. reality being the measure.

xcojo has a point.

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so it will be down, but up in reality. reality being the measure.

xcojo has a point.

Nah. xcojo is just a dimwit.

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Nah. xcojo is just a dimwit.

not even witty I would venture.

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