ICS Magazine

Retail Sales Rebound, Jobless Claims Fall

August 12, 2004
WASHINGTON (AP) -- Retail sales, which had taken a sharp plunge in June, rebounded by 0.7 percent last month while the number of Americans filing new claims for unemployment benefits fell to a five-week low in early August.

Economists saw both the rise in retail sales and a decline of 4,000 in the number of laid-off workers filing for jobless benefits, reported by the government Thursday, as hopeful signs the economy is rebounding from a worrisome pause in activity in the early summer.

The Commerce Department said the 0.7 percent gain in retail sales last month followed a revised 0.5 percent decline in June.

While the July rebound was smaller than the 1 percent advance that many economists had been expecting, the 0.5 percent June drop was revised upward from a much worse 1.1 percent decline that the government had originally reported.

The Labor Department said the number of people filing first-time claims for unemployment benefits fell by 4,000 last week to 333,000, a five-week low and a sign that the labor market in August may be improving after a disappointing July.

Analysts said an improving labor market is critical to keep the current economic recovery alive since that translates into rising incomes to support consumer spending, which accounts for two-thirds of economic activity.