Jobless Claims Fall, Inventories Decline, Retail Sales Surpass Estimates

- Initial Jobless Claims for this week fell to 365K versus estimates of 370K and 383K the prior week.

- Continuing Claims fell to 3020K versus estimates of 3020K and 3030K prior.

- Wholesale Inventories for March fell .1% versus estimates of a .5% gain and a .9% increase in February.

- ICSC chain store retail sales rose 3.6% in April versus estimates of a 2.0% gain.

BOTTOM LINE: Initial jobless claims fell last week more than economists expected, Bloomberg reported. The four-week moving average for initial claims rose to 367,000 from 364,500 the prior week. The unemployment rate among those eligible for jobless benefits, which tracks the US unemployment rate, held steady at a historically low 2.3%. I still expect jobless claims to trend lower from current levels through year-end as exports continue to boom, housing-related job losses subside and consumer spending picks up.

Inventories at US wholesalers unexpectedly fell in March as sales rose, Bloomberg reported. Sales jumped 1.6% versus a .5% decline in February. Distributors had enough goods on hand to last 1.09 months at the current sales pace, down from 1.11 months in February. Stockpiles at auto wholesalers fell .7% as sales surged 4.5%. Inventories should trend lower over the coming months as demand strengthens.

The UBS-International Council of Shopping Centers retail sales for April rose 3.6 percent, exceeding the 2 percent growth estimate. Moreover, 19 retailers beat estimates, while nine missed. Wal-Mart(WMT) reported a 3.2 percent gain in same-store sales. Analysts polled by Thomson Financial expected a 2.1 percent gain. The world's largest retailer said business was helped by strong sales in healthcare and food items as well as entertainment products like flat-panel televisions, video games and gaming consoles. The company said apparel sales also improved, despite cold weather, but home furnishings sales were weak. As well, Costco(COST) reported an 8 percent increase in same-store sales, surpassing the 6.1 percent estimate. Teen apparel sales were also brisk. Abercombie & Fitch Co.(ANF) reported a 6 percent gain in same-store sales, versus the 2.3 percent estimate. Aeropostale Inc.(ARO) reported a 25 percent surge in same-store sales for the month. The figure surpassed the 7.1 percent estimate. I expect retail sales to improve again this month on warmer weather, less economic pessimism and consumers spending their tax rebate checks.