Retail Sales Down in December, Foreclosures Up
The bad news is in. Analysts had expected a 0.5% increase in retail sales during the month of December. The numbers bear out an actual 0.3% decrease in retail sales, with the number of jobless claims still high, but decreasing slightly:
U.S. retail sales fell in December unexpectedly, signaling restraint by consumers during the holidays as the economy wrestles with high unemployment.
Meanwhile, the number of U.S. workers filing new claims for jobless benefits unexpectedly increased last week, but a drop in the four-week moving average to its lowest level since August 2008 showed claims are still trending downward. Total claims lasting more than one week, meanwhile, decreased.
Retail sales declined 0.3%, the Commerce Department said Thursday. Economists surveyed by Dow Jones Newswires forecast a 0.5% increase.
Meanwhile, another sign that recovery is almost certainly not underway comes in the form of the latest foreclosure numbers:
Foreclosures jumped 14 percent in December 2009 from the previous month, according to a new report from foreclosure listing Web site RealtyTrac.com.
The increase came despite foreclosure suspensions during the holiday season from companies like Citigroup // [C 3.515 0.015 (+0.43%) ] // , Bank of America // [BAC 16.75 0.13 (+0.78%) ] // and Fannie Mae // [FNM 1.14 — UNCH (0) ] // .
“Had we not had a moratorium, it would have been even higher than we saw,” said Rick Sharga, vice president of marketing at RealtyTrac.com. “We’ll probably see an increase in the first quarter as well.”
In all, 349,519 properties received a foreclosure notice in December, up 15 percent from the year before. That’s one in every 366 housing units receiving a foreclosure notice, which is defined as a default notice, bank repossession or auction sale notice.
This appears to reenforce what many conservatives had said from the onset, and a principal reason why TARP and porkulus were a bad idea: all that a moratorium on foreclosures did was prolong the inevitable. Had the economic downturn been allowed to run its course with minimal interference, we might well be out of it by now. At best, foreclosure moratoriums and massive injections of capital to troubled banks have simply served as a band-aid that barely covers a gaping wound. What should serve as one of many repudiations of the sort of Keynesian theory that the Obama administration is so in love with will, most likely, be spun the way failures of Keynesian theory always are: as a lack of yet more money and more interference in markets.