by Ian Shepherdson

Two bits: First, retail sales stopped their months-long slide and went — brace yourself — UP, by one percent. Second, the number of new claims for unemployment benefits dropped a bit, but remained near 26-year high.

The underlying trend in core is still clearly downwards — the
January core gain has to be set against five straight declines averaging 1.1% — and there is no reason to expect any recovery soon. The headline relief today is welcome but it is unlikely to last.

Shepherdon's take on unemployment, after the jump.

 

He writes:

Jobless claims fell 8K to 623K, above the consensus 610K. Last week's claims were revised up by 5K to 631K, a new cycle high.

The 40K leap in claims last week looked unsustainably rapid but we had hoped for more than an 8K correction this week. The new data therefore reinforce the impression that the underlying pace of layoffs is continuing to rise rapidly, setting the scene for even bigger declines in payrolls.

Shepherdson adds that his team has no confidence we're reaching a peak in jobless claims, and that the highs of the mid-1970s and early '80s would now require claims of more than 1 million a week.