Economy Watch: Jobless Claims, Leading Indicators Static

The U.S. Department of Labor reported that initial jobless claims for the week ending May 12 were 370,000, which means that the rate didn't budge compared with the week before.

By Dees Stribling, Contributing Editor

The U.S. Department of Labor reported on Thursday that initial jobless claims for the week ending May 12 were 370,000, which means that the rate didn’t budge compared with the week before. The four-week moving average, which is usually less volatile, came in at 375,000, or a decrease of 4,750 from the previous week’s average, and reflected the fact that claims have been dropping for about a month now, after a worrying rise in late March and early April.

The Conference Board reported on Thurday that its Leading Economic Index (LEI) likewise didn’t move much recently, seeing a decline of 0.1 percent in April to 95.5 (the relatively prosperous 2004 = 100). The downtick followed a 0.3 percent increase in March and a 0.7 percent increase in February.

“The indicators reflect an economy that’s still struggling to gain momentum,” Ken Goldstein, an economist at the Conference Board Growth, noted in a press statement. “Growth is slow, but choppy, and consumers, executives and investors are looking for more progress.”

E-commerce rises steadily

The Census Bureau released its first quarter 2012 report about e-commerce on Thursday, which found that sales though that retail channel were $53.2 billion for the quarter, an increase of 3.1 percent compared with the last quarter of 2011. Compared with the same quarter in 2011, e-commerce sales gained 15.4 percent.

The report also shows that e-commerce, in the grand scheme of U.S. retail, is still a relatively small channel. All retail sales for the first quarter of the year topped $1.08 trillion, itself an increase of 1.7 percent quarter-over-quarter and 6.5 percent year-over-year.

Still, as a percent of total, shopping via the Internet has grown steadily as connectivity and familiarity with the medium have grown. About 10 years ago, according to the Census Bureau, online sales accounted for less than 2 percent of total retail sales. As of this year, e-commerce is more than 5 percent.

Various kinds of euro-debt downgraded

Ratings agencies, which have been in a downgrading mood for a while now (ever since the US downgrade back during the Summer of Possible Default), did more downgrading on Thursday. Moody’s Investor Service cut—by one to three notches—the long-term debt and deposit ratings for 16 Spanish banks, plus a British subsidiary of Banco Santander. Moody’s cited four reasons: the lousy economy in Spain; reduced creditworthiness of the Spanish nation; a lot of bum real estate loans on the banks’ books: and the whole euro mess.

Fitch, meanwhile, had a go at downgrading Greece, which might have surprised observers who believed that Greek debt was as low as it could go. In any case, the ratings agency knocked Greek debt from B- to CCC, which is as low as a debtor can go without actually being in default. “The downgrade of Greece’s sovereign ratings reflects the heightened risk that Greece may not be able to sustain its membership of Economic and Monetary Union,” the agency said in a statement (of the obvious).

Wall Street was still in a foul mood on Thursday, apparently worried about Greece (whose economy, it should be noted, is about the size of Wyoming’s). Despite the big-deal IPO by Facebook, the Dow Jones Industrial Average lost 156.06 points, or 1.24 percent, while the S&P 500 and the Nasdaq were down 1.51 percent and 2.1 percent, respectively.

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