My Mortgage Blog

Depending on your perspective, retails sales for July were either something about which to be glum or reason to feel cautiously optimistic. How’s that? Well it all depends on what part last weeks’ retail sales report from the Census Bureau you highlight.

Overall, retail sales for the month were sluggish at best, with July’s retail and food services sales growing by 0.2 percent over June to hit $424.5 billion. Compared to last year, July’s sales were 5.4 percent higher than July 2012.

Key year-over-year performers included retail trade sales, which grew by 5.6 percent over July 2012; auto and other motor vehicle dealers, which increased 13.3 percent from July 2012; and non-store retailers, which saw 8.8 percent growth over last year. But on a monthly basis, their performance was lackluster with retail trade sales up 0.1 percent; auto dealers down 1.1 percent; and non-store retails up only 0.1 percent.

However, core retail sales, which exclude activity such as auto sales and building materials, saw 0.5 percent growth. This was encouraging because sales in this category more closely reflect consumer buying habits, and a 0.5 percent monthly gain left some retail sales experts optimistic that households are spending a little more freely.

In related news, the consumer price index for all urban consumers rose by 02 percent, the Department of Labor reported last week. Key drivers for the index’s growth were gains in prices for gasoline, housing, clothing and food, among other goods. July’s core CPI, consumer prices excluding food and energy prices, grew by 0.2 percent over June and 1.7 over July 2012.

Meanwhile the Producer Price Index for finished goods was unchanged in July after June saw 0.8 percent growth, the department also reported. July saw a 0.1-percent gain in prices for core finished goods (excluding food and energy), but that was offset by a 0.2-percent decrease in the index for finished energy goods. Prices for finished consumer foods were unchanged.

Employment news saw a major headline last week with initial jobless claims hitting their lowest monthly level since 2007. First-time claims for unemployment insurance filed during the week ending Aug. 10 declined to 320,000, a 15,000-claim drop from the previous week's revised figure of 335,000, the Employment and Training Administration reported last week. The four-week moving average ticked down to 332,000, a decline of 4,000 from the prior week's revised average of 336,000.

The total number of unemployed Americans for the week ending Aug. 3 was 2,969,000, a drop of 54,000 people from the previous week's revised level of 3,023,000, the Administration also reported. The four-week moving average was 2,986,500, a decrease of 38,500 from the preceding week's revised average of 3,025,000.

In real estate, building permits issued for construction of private housing in July hit an annual rate of 943,000, according to last week’s report from the Census Bureau and Department of Housing and Urban Development. This marked a 2.7 percent increase over June’s revised rate of 918,000 and a 12.4 percent gain over July 2012’s estimate of 839,000. Permits issued for single-family homes in July ticked down to a rate of 613,000, which was 1.9 percent below the revised June figure of 625,000.

Starts on construction of private housing in July grew to an annual rate of 896,000, which represented a 5.9 percent increase over June’s revised estimate of 846,000 and a solid 20.9 percent gain over July 2012 rate’s of 741,000. That said, starts on single-family homes dipped to a rate of 591,000, which was 2.2 percent under June’s revised figure of 604,000.

Completions on private housing in July grew by 1.8 percent to hit an annual rate of 774,000, and were 15 percent over July 2012’s rate of 673,000. Completions of single-family homes grew by 5.9 percent over June to reach a rate of 571,000.