On a year-over-year basis, chain store sales are now up just 1.1%, according to the International Council of Shopping Centers, which released new weekly data this morning for the week ended Saturday. The current reading is the worst since July 2003 and well below "normal" levels of about 3.5% or so.
Keep in mind that these figures are not adjusted for inflation, which means that as in December, retail sales continue to contract in January, at least from what we can tell from the available data thus far.
From these weak spending numbers I would expect materially worse economic news ahead. What's likely to follow the decreases in spending are cutbacks in output, which will result in a spike in jobless claims and a big drop in payrolls.
P.S. Will you be there when Cramer makes his next move?
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Tony Crescenzi Blog Flipped! LIBOR Below Funds 1/14/2008 2:14 PM EST LIBOR has been dropping steadily all year, and for the first time since 2003, has dipped below the fed funds rate.
Tony Crescenzi Blog Rate-Cut Odds Keep Rising 1/14/2008 11:51 AM EST Despite today's rally, the odds of a rate cut continue to go up.
Tony Crescenzi is the chief bond market strategist at Miller Tabak + Co., LLC, and advises many of the nation's top institutional investors on issues related to the bond market, the economy and other macro-related issues. At the request of the Federal Reserve, Crescenzi is a regular participant in the board's Livingston Survey of economic forecasters. He is also the author of the revised investment classic, The Money Market,
first published in 1978 by Marcia Stigum, and The Strategic Bond Investor. At the time of publication, Crescenzi or Miller Tabak had no positions in the securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Crescenzi also is the founder of Bondtalk.com, a popular Web site covering the bond market and the economy. Crescenzi appreciates your feedback; click here to send him an email.
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