The U.S. Census Bureau has just released its monthly report on retail sales activity. The Census Bureau observed that retail sales for July grew about 0.4 percent from June and had grown 5.5 percent since June of 2009. The increase was not as large as they had been forecasted to be. This, along with other economic data would indicate that recovery is going to be a slow process. Consumer prices also saw a slight uptick. Consumer prices are being watched closely, as increasing prices and decreasing incomes and assets are signs of deflation.
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July of this year had a very modest improvement in retail spending. The US Census Bureau reported a gain of 0.4 percent for the month, but that isn’t a complete picture. Discretionary spending, or goods like electronics, jewelry, or electronics really fell by 0.42 percent. Discretionary spending is up 2.77 percent from a year ago, according to the Christian Science Monitor. Retail sales, according to the Wall Street Journal, had fallen the previous two months, as May sales were down 0.3 percent and June was 1.0 percent lower than May.
Modest gains helped by auto sales
The gains within the retail sales were helped along by auto sales, confirmed by the profits that Ford and General Motors realized for this last quarter. The bulk of the retail sales increases, as outlined by Bloomberg, were due to sales of vehicles and the gas necessary to drive those new automobiles around. All other categories of retail sales combined for a loss of 0.1 percent. There was also an increase in consumer prices. The Consumer Price Index saw an increase of 0.3 percent, when not large is nevertheless prices going up in a time of higher unemployment.
Watching for signs of deflation
The recovery is going slower than individuals would like, and unemployment is still hovering around 10 percent. The Federal Reserve is presently looking for signs of deflation, which is where prices of goods increases when less cash is accessible to go around. There’s less wealth held in housing and there are fewer individuals employed to their full capacity. Overall conditions, including an increased savings rate, indicate trepidation of consumers to spend on larger items.
Find more information on this topic
CS Monitor
csmonitor.com/Money/Paper-Economy/2010/0813/Retail-sales-up-in-July
Wall Street Journal
blogs.wsj.com/marketbeat/2010/08/13/price-retail-sales-data-arrive-in-line-with-expectations/
Bloomberg
bloomberg.com/news/2010-08-13/retail-sales-in-u-s-increased-0-4-in-july-less-than-economists-forecast.html
