Reign of Poor Economic Data Pours On

Today's economic data releases offered nothing but bad news, but what's a little more water when you are already soaking wet.

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The dollar continued to slide yesterday and this morning, and global markets were none too pleased. ECB President Trichet, who I thought was a venereal disease until recently, was caught this morning criticizing "disorderly currency moves," calling them "undesirable." Sorry about that Jean-Claude, but what did you expect after you kept rates steady last week? vou vou vou...

After this is all said and done, Trichet could come out looking worse than Bernanke. Critics will argue that he had clearer signs of economic deterioration to act upon than Bernanke, including the very important lead evidence in the U.S. economic data. America is still too important a market for developed Europe, which contrasts to the situation in Asia where developing domestic consumption is driving sustainable growth.

Trichet is keeping up the inflation fight, so perhaps one of these two is destined to come out looking like the genius and the other the fool. Which do you think is the fool? Comment at the bottom of the article (at the site for email readers).

Economic Data & Analysis

Retail Sales

Monthly retail sales for February surprised even us this morning. The report showed sales fell 0.6% from January, versus expectations for growth of 0.2%. We expected the metric to show growth as well, since weekly ICSC same-store figures had improved over the month. So, this seems to indicate that retailers are reeling in growth of new stores and possibly closing a bunch of existing locations. That would coincide with the employment report, which showed the retail sector shedding jobs almost as quickly as manufacturing and construction. We've already noted the store closings at Macy's (NYSE: M), Talbots (NYSE: TLB) and others. Expect that trend to expand as some of the poorer running chains still grew during the drunken shopping spree of the last forever years.

Detroit readers should be interested to know that excluding autos, retail sales fell just 0.2%. In other words, cars still ain't sellin. Good news came from VW (XETRA: VOW.DE) though, with a report that the automaker is actually considering setting up a new plant in the U.S. The Greek knows a couple guys that might be interested in selling one or two of those things, Ford (NYSE: F) and General Motors (NYSE: GM). And get a load of this, Toyota (NYSE: TM) is actually concerned that the rising yen might impact its profits and the competitiveness of its prices versus Korean counterparts like Hyundai Motors (Nasdaq: HYMTF.PK). How about that about face...

If you're digging for good news, health and personal care stores saw a sales increase of 0.5%. Health care is still safe to invest in until the general election campaigning begins in earnest and the Democratic nominee emerges as the leader. Efforts to bring Socialist like health care to all, which by the way, as a noncorporate citizen, I benefit from, should cut profits for health care providers and drug developers and producers. In other words, if you elect the Robin Hood of health care, you had better also sell the sector and send me some money as well. There's one group I like though in the sector no matter what, but I'm not leaking it ahead of my portfolio introduction. Ha ha...

Weekly Initial Unemployment Claims

At 353K, weekly jobless claims matched the prior week measure. Well, at least the rate of addition of newly unemployed didn't deteriorate. There's not much more to say about that. However, let's consider how bogus the 4.8% unemployment rate is. Nonfarm payrolls decrease two months in a row and unemployment improves? Okay... The excuse, or wording, for how and why this occurred is that some people left the workforce. Right... And why did they leave the workforce? It was not because they all won the lottery.

It was more likely because they couldn't find jobs before their unemployment benefits ran out. So, now they're out there still unemployed and also unaccounted for, while still facing monthly bills, and while still underwater in mortgage and other debt. Yeah, that's a healthy situation... So, if you read anywhere that the unemployment rate change was a positive, think again.

Signs of rising unemployment could be seen in today's report that foreclosures rose 60% in February, versus the same period of 2007. However, don't get scared by the big headline every single media outlet made sure to highlight and exaggerate today. In fact, the rate of increase is decreasing, since bad numbers from the prior year are finally getting lapped. The rate should continue to improve as the months progress, unless of course unemployment increases substantially or the price of bread reaches $10. Great, but both of those things seem possible, or dare we say likely?

Import Prices

Finally some good news. Import prices rose just 0.2% in February. But wait! Excluding petroleum price change, prices actually rose 0.6%! Holy expensive guacamole Batman! Mrs. Consumer, you better be worried this number. It means commodity prices are making there way through the system of manufacturers, distributors and retailers to you. The technical term on the Street for this is, "pass through." Yep, and right to you. How's that hot potato...?

Thank you. (disclosure)