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Retail Sales In U.s. Increase For A Second Month

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http://www.bloomberg.com/news/2010-09-14/retail-sales-in-u-s-increase-more-than-estimated-in-second-monthly-rise.html

Sales at U.S. retailers rose in August for a second consecutive month, easing concern the economy will stumble in the second half of the year.

Purchases increased 0.4 percent following a 0.3 percent gain in July that was smaller than previously estimated, Commerce Department figures showed today in Washington. Sales excluding automobiles advanced twice as much as forecast.

Demand at chains like Kohl’s Corp. and Ross Stores Inc. climbed as more states had tax-free holidays and some merchants offered bigger discounts to lure back-to-school shoppers. A lack of jobs and the need to repair household finances will probably restrain consumer spending, which accounts for about 70 percent of the economy, for the rest of the year.

“It’s reassuring,” said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York, who correctly forecast the ex-auto sales figure. “It takes out some of the fears we had about a month ago about the economy maybe slipping into recession. If the labor market picks up, it’s sustainable.”

Go recovery, retail sales are up. Yippee.

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However.....

http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/8002200/Tax-free-holidays-persuade-US-consumers-to-get-out-their-credit-cards.html

Almost 20 tax-free holidays and heavy discounting helped retail sales in the US bounce back sharply last month.

Excluding the purchase of cars, retail sales jumped 0.6pc over the month, higher than had been expected, and stronger than a 0.1pc decline in July.

The report from the Commerce Department was the first major economic release in more than a week.

The surprise increase was powered by higher petrol sales, and a 1.6pc climb in clothing sales, something that analysts put down to parents buying uniforms ahead of the new school year.

States across America also appeared to have successfully lured shoppers with 17 tax-free holidays during the month.

While the report bolstered the view of those, like billionaire Warren Buffett, who are sceptical that the US faces another recession, economists pointed out the report revealed an American shopper behaving far more cautiously with their credit card.

"Consumers are still spending conservatively and allocating funds toward more necessary purchases," according to Michelle Meyer of Bank of America.

Suddenly this doesn't appear that positive....

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Retail $ales - Is It As It Appears?

Let's have a look...

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for August, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $363.7 billion, an increase of 0.4 percent (±0.5%)* from the previous month, and 3.6 percent (±0.5%) above August 2009. Total sales for the June through August 2010 period were up 4.7 percent (±0.3%) from the same period a year ago. The June to July 2010 percent change was revised from +0.4 percent (±0.5%)* to +0.3 percent (±0.2%).

Hmmmm.... looks pretty damn good right?

Well, let's look inside.

Autos were down, but we already knew that from the previous auto dealer reports. So we'll leave that alone, since it was "in the market" already.

Looking down the table we see that Electronics were down materially - a bit over 1%.

What was up? Food and beverage (1.3%), health and personal care (0.6%), gasoline (1.9%), clothing (1.2%), sporting goods (0.9%) and general merchandise (0.4%)

Meh. Food and beverage and gasoline are not good, those are bad - those are non-discretionary purchases, mostly. Clothing and sporting goods both correlate with back-to-school. But so does electronics (specifically, computers for kids going to college) and they were down materially.

So what do we learn from this?

That "back to school", despite the whining from retailers, wasn't really all that bad - for necessary items. For discretionary purchases the month wasn't nearly so solid. Cost of living increase is absorbing the alleged gains.

Indeed, the entire gain of food and gasoline sales, $1.316 billion, compares in an interesting fashion with the total non-auto headline gain of $1.923 billion - that is, these non-discretionary purchases comprised about 70% of the total "improvement" ex-autos.

No wonder people aren't buying cars, TVs and computers - they don't have any money left!

How do you spell "squeeze" on the consumer's budget, and further, despite the claims of "no inflation", perhaps you can square this against the non-discretionary increase in purchase allocations against food and gasoline which, of course, The Fed and "economists" don't count in the "Core" inflation rate.

Dennigers take on the figures.

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http://www.nytimes.com/2010/09/15/business/economy/15econ.html?_r=1&ref=business

Two economic indicators — business inventories and retail sales — both topped forecasts in government reports released Tuesday.

In one report, business inventories in July posted their largest increase in two years, as sales rebounded strongly, the Commerce Department said

Inventories rose 1 percent to $1.38 trillion, the highest level since May 2009, after increasing by a revised 0.5 percent in June. July’s percentage increase was the largest since July 2008. Markets had expected July inventories to rise 0.5 percent from a previously reported 0.3 percent increase in June.

Inventories are a crucial component of changes in the gross domestic product over the business cycle. Investments in inventories were a chief factor to growth during the early part of the recovery from the worst downturn since the Great Depression.

The increase from the rebuilding of merchandise stock is, however, fading and a small contribution from inventories contributed to a sharp slowdown in growth in the second quarter. But the trend in July, if sustained, could see inventories making a significant contribution to G.D.P. growth in the third quarter.

In July, business sales increased 0.7 percent, the largest gain since March, to $1.09 trillion in July after declining 0.5 percent in June.

The inventory-to-sales ratio, which measures how long it would take to clear shelves at the current sales pace, was unchanged at 1.26 months’ worth.

Excellent news for Q3 GDP figures then!

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are retail sales inflation adjusted? ie: did more stuff sell or was it the same amount of stuff but the stuff was more expensive? I never know...

Sorry to bump this back up but does anyone have an answer? I am interested.

Edited by MinceBalls

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Sorry to bump this back up but does anyone have an answer? I am interested.

Can't find anything specific but did find this:

http://norris.blogs.nytimes.com/2009/04/14/retail-sales-much-ado-about/

April 14, 2009, 12:20 pm

Retail Sales: Much Ado About . . .

Retail sales are down this month, the government says, after a couple of months of increases. This is being analyzed as if it were important. I doubt it.

The way I look at it, retail sales have picked up a bit but are still at their worst levels in memory. Even if you somehow decide not to count the car industry, they are about as bad as they have been over the last four decades.

Using month-to-month changes strikes me as requiring excessive confidence in government statisticians. They try to seasonally adjust retail sales figures, but that is a thankless task, subject to variations in holidays, weather and sales promotions. So I prefer to use three-month moving averages, and to look at year-over-year changes. That filters out a lot of noise.

Over time, comparing even those numbers is doubtful, because of changing levels of inflation.

Right now, the overall figures are down about 10 percent year-over-year, before taking inflation into account. But gasoline station sales are down by about a third, thanks to lower prices. That fact may be helping to support other sales, partly offsetting worries about income and the fact that credit is harder to get.

My preferred measure takes out gasoline station sales. Then I adjust the figures based on the consumer price index for items other than energy. The March figure for that comes out tomorrow, so I assume it was unchanged from February.

Non-gas retail sales, adjusted for inflation, were down 8.7 percent year-over-year in the three months through March. That is a significant improvement from the 9.8 percent drop registered in the final three months of 2008.

The data goes back to 1968. The worst showing by that measure before the current crisis was in 1980, when the maximum decline was 8.9 percent. In 1974, the decline got to 7.1 percent.

I also did the numbers taking out the car industry — although I could think of no logical reason to do so except that car sales are volatile and right now they are really really bad. With that adjustment, the worst of the current cycle is just about the same as the worst of the early 1980s and mid-1970s recession.

All in all, things seem to be getting a little less horrid on the retail sales front, after a sharp plunge at the end of 2008. That is no sign of recovery, but it is another indication that the economy is no longer falling rapidly.

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  • 261 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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      • Even
      • up 2.5%
      • up 5%



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