Sales And Manufacturing Data To Warm The Cold Winter Market

Well, we hope the sales and manufacturing figures will warm the market, anyway.

First, we have the ICSC-Goldman Store Sales figures, which is a "weekly measure of comparable store sales at major retail chains". It specifically focuses on general merchandise - about 10% of total retail sales - so it isn't a huge market mover. Nevertheless, it never hurts to keep an eye on even the little details. Everything adds up. For the week ending 1/29/2011, the rate of change in store sales tracked by the index increased by 20 bps, to close at a -1.0% decrease in sales. For the rolling year, store sales are up 1.6% (a decline of 120 bps from the previous week).

There's no link for the ICSC-Goldman Store Sales original data, because they want a paid subscription.

Next, we have the Redbook, which is "a weekly measure of sales at chain stores, discounters, and department stores". So it tracks slightly different things from the ICSC-Goldman Store Sales. Interestingly enough, though, it's showing similar figures as the ICSC-Goldman report: rolling year sales for the week ending 1/29 are down 50 bps to a 1.8% increase.

Again, the Redbook report wants a paid subscription. So no link.

Taken together, the two reports indicate quire strongly that retail sales are slipping. Keep an eye out for the official retail sales report when the Census Bureau releases it on February 15 - it may very well be disappointing.

Next up is the Institute for Supply Management's Manufacturing Index. In December, the overall index was at a level of 57.0%, and the consensus expectation is that it will rise to 57.5%. The actual figures, as reported on the ISM web page, are even better. The index has hit 60.8%, its highest level since May 2004 and the sixth consecutive month of month-over-month growth. Drilling in to the report:

• New Orders are up 580 bps to 67.8%. The industries reporting new orders growth are petroleum & coal products, primary metals, computer & electronic products, transportation equipment, wood products, machinery, fabricated metal products, miscellaneous manufacturing, chemical products, paper products, electrical equipment, appliances & components, and food, beverage & tobacco.
• Production is up 50 bps to 63.5%.
• Employment is up 280 bps to 61.7%
• Exports are up 750 bps to 62.0%
• Imports are up 450 bps to 55.0%

Finally, construction spending. November saw a 0.4% increase in construction spending, and the analysts are expecting that to slow to only a 0.2% increase in December (yes, there is a full month worth of lag on this lagging indicator). And what does the Census Bureau have to say about that expectation. They laugh, laugh I say, in the face of the analyst's expectations. Constructions spending actually decreased at a rate of 2.5%. Private construction sank 2.2% for the month, while public construction sank 2.8%.

In summation? Last week was all right for retail sales, although they show signs of slowing. December was good for manufacturers, terrible for construction. The Street will most likely be relatively happy with these results. Except for that part of the Street that invests in construction.