Monday, August 13, 2007

Retail Sales Up

From the Census Bureau:

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for July, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $376.1 billion, an increase of 0.3 percent (±0.7%)* from the previous month and 3.2 percent (±0.8%) above July 2006. Total sales for the May through July 2007 period were up 4.1 percent (±0.5%) from the same period a year ago. The May to June 2007 percent change was revised from -0.9 percent (± 0.7%) to -0.7 percent (± 0.2%).

There is one very important point from the above paragraph. These figures are not adjusted for price changes. But the July inflation report isn't out yet. So, we don't know how much to adjust these figures yet. However, we do know these figures will be lower by some amount in the next few days. So, realize these figures are incomplete right now.

Here's what Bloomberg said about the report:

Aug. 13 (Bloomberg) -- U.S. retail sales rose more than forecast in July, a signal that consumer spending will moderate, not collapse, as the housing recession persists.

The 0.3 percent increase followed a revised 0.7 percent decline the prior month that was smaller than previously estimated, the Commerce Department said today in Washington. Purchases excluding automobiles climbed 0.4 percent after falling 0.2 percent.

They gave the IPhone credit for a 1% increase in sales at electronics stores.

However, car sales are still sagging:

The 0.3 percent rise in overall retail sales last month was slightly better than the 0.2 percent gain that had been expected. It was driven by increased demand for electronics gear and appliances, furniture and clothing. These increases helped to offset a 0.3 percent slump in sales at auto dealerships which followed an even bigger 2.9 percent drop in June.

I have speculated that weak car sales are a sign of consumer concern, that the consumer doesn't want to make a big purchase right now.

This isn't a bad report, but it's not great either. I would put this under, "things are luke-warm right now".