Earnings aren’t the only thing driving the market higher this morning – better than expected economic data is also giving a lift to stocks.  Jobless claims came in at 521K which was better than the 540K analysts expected.  Continuing claims also declined to 6.04MM – this is a good sign for future hiring.

The more important news of the day was chain store sales which rhymed with the ICSC data that showed improvement in recent reports.  Overall, the sales remain sluggish, but were better than anticipated. Target reported a 1.7% decline, Nordstrom reported a 2.4% decline, Neiman Marcus reported a 17% decline, Kohls reported a 5.5% increase, JC Penney reported a 1.4% decline and CostCo reported a 3% increase.  All in all, the numbers are decent, but comps to last year were very easy.  Econoday reports:

Chain stores posted very strong results in September pointing to a significant month-to-month increase for the non-auto non-gas category of next Wednesday’s retail sales report from the Commerce Department. This year’s shift of the Labor Day weekend deeper into September helped the month’s results with year-ago comparisons especially helped by last year’s hurricanes, Ike and Gustav, not to mention the turmoil following the Lehman Brothers collapse. Chains did report weakness in home furnishings, perhaps a hint of trouble for the building materials component. Still, today’s reports are very positive though strength in non-auto non-gas sales is not likely to offset the post-clunker plunge in vehicle sales. But vehicles aside, the consumer, despite weak confidence and job troubles, is showing some spark.

Are we on the verge of a consumer rebound?  Michael P. Niemira thinks so:

“Let the retail recovery begin,” said Michael P. Niemira, chief economist at International Council of Shopping Centers. “This is the start of a better performance and better fundamentals.”

Unfortunately, one month a trend does not make.  The recent data on consumer credit and auto sales tells a drastically different story….