Retail Sales Decline

December 12, 2002

· Retail sales rose last month in line with Consensus expectations for a 0.4% gain. October sales were revised up due to slightly stronger gains in auto and nonauto sales. Total retail sales were up at a 2.7% annual rate YTD through November.

· Sales excluding motor vehicles and parts dealers rose quite a bit more than expectations for a 0.2% gain. Year to date nonauto retail sales were up at a 4.9% annual rate through November.

· Furniture and home furnishing store sales rose 1.6% (3.4% YTD, AR) following strong results in the prior four months which were revised higher. The November gain reflected a huge 2.3% rise in furniture sales and a 0.9% rise in electronics and appliances sales.

· Sales at general merchandise stores rose 0.3% adding to a 1.2% gain in October. Year to date sales were up at a 4.5% rate through November.

· Apparel store sales fell a sharp 1.3% (1.1% AR, YTD) following a huge 5.5% gain in October.

· Motor vehicle dealers' sales fell a slight 0.1%, the third monthly decline in a row. The decline may have reflected price discounting. Unit sales of light vehicles rose 3.8% last month to 16.04 mil.

· Sales at gasoline service stations rose 0.4%.

	Nov	Oct	Y/Y	2001	2000	1999
Retail Sales & Food Services	0.4%	0.1%	2.1%	3.9%	6.7%	8.4%
Excluding Autos	0.5%	0.8%	5.0%	3.4%	7.3%	7.4%

Import Prices Down

December 12, 2002

By Tom Moeller

· Prices for imported commodities fell much more than Consensus expectations for a 0.1% decline. October figures were little revised.

· Petroleum import prices fell sharply and by the most since back to back double digit declines last Fall. Still, petroleum prices are up at a 51.6% rate since December. So far in December the price of Arab Light crude oil has run slightly higher than the $22.20/bbl averaged in November.

· Nonpetroleum import prices rose slightly following the slight October drop (0.3% YTD, AR).

· Prices of imported capital goods were unchanged following two down months. Nonauto consumer goods prices fell for the second month in three and imported motor vehicle prices also were down.

· Export prices rose slightly (1.3% YTD, AR). Food prices rose strongly, reversing the prior month's steep drop. Other export prices either fell or were tame.

Import/Export Prices (NSA)	Nov	Oct	Y/Y	2001	2000	1999
Import - All Commodities	-1.0%	0.0%	2.4%	-3.5%	6.5%	0.9%
Petroleum	-10.0%	0.3%	37.5%	-17.2%	66.5%	34.2%
Nonpetroleum	0.1%	-0.1%	-0.1%	-1.5%	1.0%	-1.4%
Export - All Commodities	0.1%	-0.1%	1.0%	-0.8%	1.6%	-1.3%

Initial Claims for Jobless Insurance Surged

December 12, 2002

By Tom Moeller

· Initial claims for unemployment insurance surged more than expected last week. Aberrant seasonal adjustment factors were cited by the Labor Department as the reason for recent volatility.

· The four-week moving average of initial claims rose to 387,250, down 10.9% y/y.

· Continuing claims for unemployment insurance fell a sharp 4.8% w/w following a like decline the prior week.

· The insured rate of unemployment fell to 2.6%, the lowest level since September 2001.

Unemployment Insurance (000s)	12/07/02	11/30/02	Y/Y	2001	2000	1999
Initial Claims	441.0	358.0	7.3%	405.8	299.8	297.7
Continuing Claims	--	3,284	-10.2%	3,021	2,114	2,186

3Q Current Account Deficit Narrowed

December 12, 2002

By Tom Moeller

· The US current account deficit came in slightly below expectations last quarter, but remained near a record level. The deficit in 2Q was revised shallower.

· The deficit in goods, services and income trade eased slightly but remained near the record. The deficit in goods and services trade deteriorated to a new record. The deficit in the income balance eased slightly.

· Foreign ownership of assets in the US rose by $148.5B versus a gain of $204.3B in 2Q and a peak rate of $302.5B early last year. Direct investment into the US improved slightly last quarter but remained at a level not seen since the mid-1990s.

US Int'l Balance of Payments	3Q '02	2Q '02	Y/Y	2001	2000	1999
Current Account Deficit	$127.0B	$127.6B	$91.3B	$393.4B	$410.3B	$292.9B
% of GDP	4.8%	4.9%	3.6%	3.8%	4.5%	3.5%
Deficit on Gds, Serv & Income	$113.8B	$114.6B	$79.0B	$343.9B	$356.9B	$244.1B
Exports	2.5%	4.8%	1.1%	-9.6%	13.6%	4.7%
Imports	1.6%	8.3%	9.8%	-8.4%	18.9%	10.4%
Unilateral Transfers Deficit	$13.2B	$13.0B	$12.4B	$49.5B	$53.4B	$48.8B

Mortgage Refinancing Drops

December 12, 2002

By Tom Moeller

· The index of mortgage applications, compiled by the Mortgage Bankers Association, plunged last week. The decline reversed the run-up in early November and dropped total applications 35% below the early October high.

· Mortgage applications to refinance collapsed, leaving them 45% below the early October high yet still up versus last year.

· Mortgage applications for home purchase have remained relatively firm.

. The recent contract rate on a conventional 30 year mortgage was 5.95%, up modestly from the low.

MBA Mortgage Applications (3/16/90=100)	12/06/02	11/01/02	2001	2000	1999
Total Market Index	862.7	1,030.5	625.6	322.7	352.0
Purchase	358.8	369.5	304.9	302.7	275.8
Refinancing	3,793.8	4,875.1	2,491.0	438.8	795.2

Commentary Archive