The report on retail sales for July has just been released by the US Census Bureau. Retail sales for July grew only 0.4 percent overall from June, and are up 5.5 percent since July of last year. The increase was less than projected. Most economic data is pointing to a slower restoration. The consumer price index has also inched higher. Consumer prices are being watched closely by economists, as numerous fear deflation due to rising costs of goods and lower employment can be on the horizon.
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There was a slight increase in retail sales for July. The U.S. Census Bureau reports that retail sales as a whole increased by 0.4 percent for July, but that figure can be somewhat misleading. Discretionary spending, or goods like electronics, jewelry, or electronics actually fell by 0.42 percent. Discretionary spending is up 2.77 percent from a year ago, as outlined by the Christian Science Monitor. Retail sales, as outlined by 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.
Bulk of gain realized with auto sales
With automobile companies beginning to make serious gains, for instance General Motors and Ford returning to profitability, the sale of cars helped retail sales figures. According to Bloomberg, the bulk of the increase was from people getting cars and, subsequently, gas. 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 still prices going up in a time of higher unemployment.
Deflation is being watched
Unemployment is just under 10 percent, and the restoration process is not progressing nearly fast enough. Deflation, which the Federal Reserve and others are planning to keep from happening, is where less money is floating around in the economy but goods start costing more. 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.
Additional details at these websites
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
