Last week we received positive readings for some key economic indicators. But I still see plenty to worry about.

Source: FRED

On Tuesday the Census Bureau announced that U.S. retail and food services sales in August were 2.7% higher than in July on a seasonally adjusted basis. True, 2/3 of the additional $9 billion in spending was attributed to motor vehicles and parts, and September car sales could be much worse than August. Another 1/6 of the new spending came from gasoline stations, and the higher average gasoline prices in August are hardly cause for celebration. But even excluding autos and gasoline, core retail sales were up 0.6% in August. Here's the summary from Stephen Stanley of RBS:

after a string of contractions, these data suggest that consumer demand is, at a minimum, stabilizing. Core retail sales may even

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This was another week when everybody but me sees an economic recovery in the works.

Certainly Thursday's report of a 0.1% decline in U.S. retail trade and food services sales for July was a disappointment. Dan Greenhaus explains why he found the number startling:

The cash for clunkers program was expected to have had quite an effect on retail sales. However motor vehicle and parts rose only 2.4%; expectations had looked for a gain more than double. Sales at auto and other motor vehicle dealers were up just 2.8%, a healthy gain to be certain but far less than many economists expected. The initial impression is that, perhaps, some of the cash for clunkers sales will find their way into the August data.

The auto numbers are indeed surprising, since we know directly from industry counts that the number of autos sold in the U.S. was up

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I'm still looking for, and still not seeing, the economic recovery that everybody is talking about.

Source: FRED.

One bit of good news this week was the Census Bureau report that nominal seasonally adjusted U.S. retail and food services sales rose 0.5% in May. But of the $1.57 billion increase in total spending, almost $1 billion of it came from extra spending at gasoline stations. An optimist might read that as an indication that consumers are now prepared to spend more, and just happened to devote most of that extra spending to gas. A pessimist might worry that it portends further cuts in spending on other items ahead. But then, pessimists always find something to worry about, don't they?

National average U.S. gasoline retail price. Source: NewJerseyGasPrices.com.

Or perhaps we can take some

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Highlights include Macy's Inc. (M), J.C. Penney Co., Inc. (JCP), Wal-Mart Stores, Inc. (WMT) and Family Dollar Stores, Inc. (FDO). The bounce in Retail sales we saw in January is starting to look more and more like just that -- a bounce, not a fundamental return of consumer spending. Since the consumer is responsible for over 70% of the economy, clearly this is significant. Here is the key section of the report: "The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for April, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $337.7 billion, a decrease of 0.4 percent (±0.5%) from the previous month and 10.1 percent (±0.7%) below April 2008. "Total sales for the February through April 2009 period were down 9.2 percent (±0.5%) from the same period a

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Friday November 14, 2008 Navivest

The U.S. Commerce Department today reported that retail sales for the month of October fell by the largest amount since they started keeping score.

According to the Commerce Department, advance estimates of U.S. retail and food services sales for October, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $363.7 billion.

This translates into a decline of 2.8% from September to October. If automobile sales are not factored in, the decline was 2.2%

Economists had been looking for retail sales with the sales of automobiles factored out, to show a decline of 1.0% from September and a decline of 1.9% with auto sales included.

This portends more bad news for the economy, as it shows that consumer spending, which makes up the bulk of the U.S economy, continues to slow and to do so at an alarming rate.

Tags: Retail Sales 

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