Initial Claims And May Retail Sales Both Modestly Better, But Is Good News Bad News?

Moments before the retail sales number was reported [4], when we reminded readers that last the April retail sales was revised lower [5]from a 100% beat to miss, we predicted that the May retail sales number (driven as usual by seasonal adjustments) would be a beat.

Look for today's retail sales seasonal adjustment beat to be revised lower shortly

— zerohedge (@zerohedge) June 13, 2013 [6]

Sure enough, that's just what happened, following a headline retail sales increase of 0.6% on expectations of a 0.4% print. After all the algos need their morning kick following last night's global risk off session. As for the final data, as we also noted, which will likely be revised lower, who cares - it is the upward kneejerk algo reaction which is all that matters. Also ignored will be the non-headline retail sales, such as ex-autos and ex-autos and gas, both of which printed +0.3%, or just in line as expected, the latter of which was a decline from last month's even more downward revised number, which dropped from 0.6% to 0.5%.

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Breaking down the seasonally adjusted data, we find that excluding the car component, the biggest jump sequentially was among the building material dealers which rose 0.9%, food and beverage stores +0.7%, and miscellaneous stores +1.2%. On the flip side, furniture and home furnishing store sellers had the biggest drop or -0.8% which does not quite fit with the theme of redecorating one's brand new home. Although it does fit if the new home is merely a rental, sublet from America's largest landlord - BlackStone.

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In other economic news, the DOL reported last week's Initial Jobless Claims [9], which printed at 334,000 on expectations of an unchanged, or 346,000 reading. This was the best number since May 3. In other words, a better number which implies a lower unemployment rate, which implies good news, which means tapering, which means bad news. Perhaps this is why futures initially jumped higher and are now grinding lower on the realization that with a tapering announcement imminent, good news is bad news.

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