US retail sales down
US retail sales out this afternoon show that August was a bit softer than July but all the weakness was in car sales.
Total sales were down 0.3% in the months after a rise of 0.8% in July.
Excluding car sales, however, consumers spent 0.2% more in August (that’s just over $259 billion), not far off the growth rate of 0.3% in July.
Poor weather and a later Labour Day influenced the sales patterns. Clothes sales were weak while on-line sales continue to boom – up nearly 15% on the year.
Looking at the underlying sales trend, the annual growth is still a very solid 7%.
The slightly weaker tone to the August numbers was well flagged in statements from leading retailers such as Wal-Mart and Circuit City.
We also saw a significant fall off in the Consumer Confidence Index for August from over 105 to 98.
Early September indications, which include the important Labour Day week-end, are better, though the numbers for Florida are weaker due to temporary closures.
Back to school purchases look robust.
The first week of September looks to be up about 3% on the previous year.
Retail sales are a big part of consumer spending which is the engine of the economy.
This year there is added importance in consumer confidence because of the election.
In 1992, a significant fall in consumer confidence undermined Bush Senior’s re-election drive.
