Retail sales came in unexpectedly strong at -1.5%, reversing only part of the cash-for-clunkers induced +2.7% from August, for a net gain of 1.2% in two months. Ex autos retail sales were up +.5%, for a 1.6% gain in the last two months. This is particularly encouraging, since as the doomers have been incessantly telling us, consumer access to credit has been more limited. In short, this gain has come from consumers spending cold, hard, saved cash.
Since bottoming in April, retail sales are up 2.7%. Ex-autos they are up 1.8%. And no, you can’t just put this down to oil prices either. They’ve been stagnant since April.
Meanwhile, Marketwatch also reported that:
U.S. businesses reduced their inventories at the fastest pace on record in August ....
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The inventory-to-sales ratio fell to 1.33 in August from 1.36 in July
This inventory/sales ratio equals that at the end of 2003, the time by which the last "jobless recovery" had finally morphed into an actual "jobs recovery."
I pointed out a couple of weeks ago that Real Retail Sales are the "Holy Grail" leading indicator of future employment. Simply put, historically, increased consumption has always, always, always, led to jobs. Today's data means that there is both demand strength and supply tightness -- about as good a precursor as you can get for jobs improvement soon.
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P.S. I pre-emptively submit the above to Invictus as a counter-demonstration of business activity and "green shoots."
From Bonddad: The internals of this report were surprisingly strong. Consider this chart from the report:
Click for a larger image.
Car sales were down 10.4%. This was expected as the cash for clunkers expired. But notice the only other activity to decrease was sales of building materials and garden supplies (think Home Depot and Lowe's), misc. store retailers and non-store retailers. That's a good sign.
4 comments:
AP writes:
Retail sales declined in September by the largest amount this year as car sales plummeted following the end of the government's popular Cash for Clunkers program. But outside of autos, sales were better than expected.
That's smaller than the 2.1 percent fall economists had expected, but still the biggest setback since sales dropped 3.2 percent in December.
its all about managing expectations....
what do business inventories look like? Retails must be stocking up on inventories anticipating renewed(?) consumer spending.
To anonymous: you are generous in assuming that the politicans practice statistical honesty. Numbers from them are as likely to be as dishonest and self-serving as there words.
I am wondering how much of the auto decline is failure of automakers to be able to ramp up production. I've had a car on order since 8/10 and another family member has had one on order since July and they still aren't built. In normal times, these would be Sept sales. Now, we'll be lucky if they're booked in October.
Anon 9:28 a.m.:
Everyone knew, after cash-for-clunkers, that auto sales would be less in September, and they were. The issue was, whether they would completely wipe out August's gain. They didn't, by a long shot.
Retail inventories are declining, and keep in mind that the inventory number we got today was from two months ago. Christmas sales should set up to be very interesting.
Paul Goodman:
I always try to find private sources for data as well, and two of those are retail. Check back in for my "weekly indicators" on Friday.
Ralph Mehler:
I know of which you speak. I have been to a few auto showrooms recently, and there is barely any inventory.
Did I mention that the new Buick Lacrosse looks like a winner? Well, good luck finding inventory in a dealer's lot.
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