January Retail Sales Rebound, But December Numbers Revised Lower… January retail sales inched up 0.2%, but the 1.2% drop in December was revised down to a 1.6% slide.
What it means – The numbers don’t get appreciably better when we strip out autos (up 0.9% in January, but down 2.1% in December). The report shows that consumers significantly pulled back at the end of the year and didn’t rebound much at the beginning of 2019.
This will make the number crunchers at the Bureau of Economic Analysis do a double take when they make their second estimate of fourth-quarter GDP. Expect a downward revision for the end of last year, from 2.6% down to 2.3% or 2.4%, and look for first-quarter GDP estimates to ease a bit as well. The Atlanta Fed’s GDPNow model forecasts first-quarter GDP to grow just 0.4%. That might be optimistic.
Consumer Prices Rose 0.2% in February, Up 1.5% for the Year… The numbers came in almost exactly on top of expectations.
What it means – Inflation excluding food and energy was up 0.1%, and the annual rate was 2.1%. These numbers will give the Fed some comfort for not raising rates and striking a dovish tone. Without inflation and with interest rates hovering at multi-decade lows, there’s not much reason to raise rates. The markets barely moved on the news.
January Durable Goods Orders Inched Up 0.4% But Fell 0.1% When Excluding Transportation… Core capital goods orders, a proxy for business spending, were up 0.8% for the month.
What it means – On a longer view, the January jump in core capital goods orders almost reverses the 0.9% decline in December. Like retail sales, this statistic shows that we’re not in a brisk economy. Making matters a bit worse, inventories were also up a bit, rising 0.4%, and unfilled orders remain flat. Without more orders for durable goods, it’s going to be hard to get the economy jumpstarted for 2019.
New Home Sales Down 6.9% in January… The median new home sales price dipped 0.6% to $317,000, showing discounts by home builders.
What it means – More of the same. The weakness in real estate isn’t new and hasn’t changed. While the slight drop in sales price isn’t good news for sellers and builders, it’s also not catastrophic.
We’ll see if sellers can hold the line and wait for buyers to come their way a bit, or if sellers will have to capitulate before the market picks up. Either way, right now it’s sort of a standoff. Keep in mind these numbers are from January. We still have one more catch up report to go before we’re on track with housing numbers.
British Parliament Holds Three Brexit Votes… First, they scotched Prime Minister Theresa May’s plan, then they voted against a hard Brexit, and finally they voted to pursue a delay, putting off the deadline of March 29.
What it means – Two and a half years and this is the best they could come up with. Pitiful. You can’t say Prime Minister May didn’t try, although her plan could’ve been written by the EU and simply mailed in. But she did come to the table with a document that addressed the issues of migration, borders, and trade. That’s more than the members of Parliament have done beyond those calling for a hard Brexit without an agreement.
Now it’s up to the EU to see if that body thinks that the delay is both allowed and warranted. Since this is uncharted territory, there’s no way to know what happens next, which is the problem. Everyone from tourists, to those living and working abroad, to businesses and financial firms are in limbo, which is not good for anyone.
Senate Votes 59-41 to Reject Trump Border National Emergency Declaration… Following the House, the Senate voted to reject the president’s declaration of a national emergency on the Southern border.
What it means – The funny thing about laws is they have to be signed by the president. Trump has said several times that if both chambers vote against the national emergency declaration, he’ll simply veto the law. Unless the House and Senate can muster a two-thirds majority, that makes this issue DOA. But at least our elected officials did something.
No matter which side people take on the issue at the border, it’s a stretch to put this in the same category as a major illness outbreak or some sort of attack. Yes, it’s big, and even a crisis, but an emergency?
Uber to Go Public in April… According to Reuters, the ride-hailing company intends to file an S-1 shortly and follow on the heels of Lyft.
What it means – In the private market, Uber is valued at $78 billion. The company might try to push its value as high as $120 billion when it goes public. While that might be up in the air, there’s one thing we know for sure. The company isn’t profitable. It consistently loses money on its ride-hailing app, and it has looked to trucking and scooters for profitability.
Dating Site Tinder Has Higher Gini Coefficient, and Therefore Higher Inequality, Than U.S… The study wasn’t completely scientific, but the general gist is that the top 78% of women are vying for the top 20% of men. That gives Tinder a Gini coefficient of 0.58, whereas the U.S. income Gini coefficient is 0.42.
It doesn’t mean the ladies get who they’re after, but that’s who the girls are “swiping.” Which leaves the bottom 80% of men trying to connect with the bottom 22% of women. The odds work out to where the average guy can expect exactly 0.87% of women to ask for a match, which works out to one in every 115.
The math was probably done by a guy who couldn’t get a match on Tinder and decided to find out, or at least come up with a reason, why.
Data supplied by Dent Research/Delray Beach Publishing
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