April foreclosures, retail sales, unemployment betray recovery story

Some people are trying to call a bottom in the economy, or even signs of the green shoots of a recovery. Not so fast.

CNN – Foreclosures: ‘April was a shocker’

Foreclosures in April exceeded even March’s blistering pace with a record 342,000 homes receiving notices of default, auction notices or undergoing bank repossessions, according to a regular industry report.

One of every 374 U.S. homes received a filing during the month, the highest monthly rate that RealtyTrac, an online marketer of foreclosed properties, has recorded in four-plus years of record keeping.

“April was a shocker,” said Rick Sharga, a spokesman for RealtyTrac. “I would have bet on a dip because March foreclosures were so high.

SeekingAlpha – Retail: April’s Sales a Blow to Those Expecting Quick Snap Back :

The 0.4% drop in retail sales in April is a blow to those expecting a quick snap back in economic output in the near term. Consumer demand accounts for 70% of output in the U.S. and stabilization in consumption is a necessary condition for recovery.

Soft numbers for April retail sales are in contrast to anecdotal evidence from retailers that sales picked up last month. The rise in January sales were buoyed by one time gains in social security benefits and reduced withholding taxes. A recent mortgage refinancing boom is expected to boost incomes and extend the recovery in spending, but that thesis is not being corroborated by the data.

The rate of contraction in the U.S. economy has slowed but the date of recovery remains a point of great debate. I have argued that household savings will continue to rise over the next few months forestalling a near term recovery.

For the bad news on unemployment see Wednesday’s post.