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Posts Tagged ‘retail activity’

What Does Rick Davis Think About Yesterday’s ICSC Report?

Posted by Larry Doyle on July 8th, 2010 4:17 PM |

When I see any economic data addressing consumer retail activity, I immediately think of Rick Davis and his fabulous work at Consumer Metrics Institute. On that note, and given yesterday’s strong upward move in the market driven largely by a positively perceived ICSC report, I went straight to the source and asked Rick for his thoughts. I had the following exchange today:

Any quick comments or thoughts on the report released by the ICSC? I
know that the report captures same store sales which makes for a big
disqualification and is not properly captured but any thoughts you may
have are always deeply appreciated.
Larry (more…)

Consumer Metrics Institute Projects 3rd Quarter GDP of -2%!! That’s Right -2%!!

Posted by Larry Doyle on June 2nd, 2010 8:25 AM |

Do you hear a grinding sound? Listen a little harder. That sound is the brakes being applied to the U.S. economy.

The current price action in commodities markets (as highlighted in my commentary yesterday, “Commodities Growling Like a Bear”) is very much reflective of this braking process. How do we measure the slowing? Where can we gain evidence? Let’s turn to Rick Davis’ fabulous work at Consumer Metrics Institute.

Recall that Rick has not only been way out in front with his calls on the growth of the U.S. economy, but also very accurate especially given that he is projecting GDP a full 4 months prior to its official release. (more…)

Consumer Metrics Institute: Double Dip Mild, but Prolonged

Posted by Larry Doyle on May 27th, 2010 6:54 AM |

Is the economy slipping into a double dip or has it already slipped and we just need to wait a few months for the mainstream media to hopefully report on it?

Clearly, our domestic and global economies are very fluid and subject to serious fluctuations given the massive amount of government intervention, but where can we go to receive a real-time look at the economy?

Let’s review the work of Sense on Cents Hall of Famer Rick Davis of Consumer Metrics Institute. Recall that Rick and his colleagues capture and review a wealth of consumer retail data across ten sectors of our economy on a ‘real time’ basis. While analysts are downstream assessing developments with production, Rick and team are way upstream assessing what the consumers are doing NOW. Current consumer activity is highly correlated with GDP out 17-18 weeks. Yes, we are getting a sneak peek at next quarter’s GDP now. Amazing stuff.

What does Rick see and what does he project? Let’s navigate. (more…)

Economic Update: Housing and Retail Sales

Posted by Larry Doyle on May 13th, 2009 8:39 AM |

Ultimately, all economic roads lead back to the housing market. The breakdown in the integrity of housing finance led us into this economic mess and any self-respecting economist (or financial commentator) will tell you that a healthy housing market will lead us out. Let’s check the patient.

The Fed has supported housing by effectively “overpaying” for refinancings. Mortgage rates relative to rates on U.S. government debt are at 17 year narrows. This development is great for homeowners who can and have refinanced. However, the pool of eligible homeowners is finite and seems to have run its course for now as recent data indicates that refinancing filings have declined while purchase activity has been unchanged. This data is reflected in the U.S. MBA Mortgage Applications Index Fell 8.6% Last Week, as reported by Bloomberg.
How about new supply of homes coming onto the market? Well, certainly home building has come to a virtual standstill with over a year’s worth of homes currently on the market. As new housing starts occur this supply can be gradually absorbed. Thus, we once again are back to the concept of needing time for the patient to heal. However, are we subject to another bout of housing sickness to hit our economy? I believe we are. Why? Two reasons:

   1. government programs forestalled but did not eliminate a number of “sick” mortgages. These mortgages would likely have defaulted with banks forcing foreclosures a few months ago.

   2. a large supply of adjustable rate mortgages will soon reset to a considerably higher rate leading to payment problems for homeowners and likely foreclsoures. Data indicating increased rates of delinquency (late payments) clearly points to increased foreclosures.

In fact, foreclosure filings just hit a record level of 342k  as reported by RealtyTrac which monitors this data nationwide. Foreclosure activity also seems to be spreading from California, Florida, Nevada, and Arizona to other parts of the country.  In fact, Idaho has recently had a surge in foreclosure activity as the unemployment rate in and around Boise has spiked.

What about home prices? The declines in home prices have certainly sparked renewed interest in prospective homebuyers. Will they enter the market at this stage? Data indicates prospective buyers continue to be patient as Bloomberg reports, Home Prices In U.S. Drop Most On Record In Quarter.

When may consumers feel confident enough to enter into the market and purchase a home? The largest factor in that decision is consumer’s confidence in their employment situation. In my opinion, with the rate of unemployment nationwide likely to hit double digits by year end, housing will remain under pressure. 

On a separate economic note, the retail sales figures for April were just released and declined .4%, and excluding auto sales, declined by .5%. The market expected April retail sales to be unchanged. This report is a clear indication the economy remains on life support. Not surprising to me, March retail sales were revised even lower from a decline of 1.1% to a decline of 1.3%.

With all due respect to credible journalists, analysts, and financial commentators, I personally do not see enough green shoots in the midst of reviewing the entire economic landscape.    

The equity markets are moving sharply lower on this news.


P.S. Sense on Cents welcomes feedback. Let us know what you are seeing in your local economies.

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