Monday, April 14, 2008
The Commerce Department reported a 0.2 percent increase in retail sales during March, largely due to surging gasoline prices - excluding gasoline, sales were unchanged.
On a year over year basis, overall retail sales have risen just 1.97 percent. Since these figures are not adjusted for inflation, real retail sales (adjusted for inflation) are now well into negative territory.
Retail gasoline prices rose 6.9 percent in March pushing gasoline station sales up 1.1 percent. From year-ago levels, gasoline purchases have risen 18.9 percent though actual consumption of gasoline has been flat.
Excluding gasoline station sales from overall retail sales results in just a 0.3 percent increase over the last year, a clear indication of how weak consumer spending has become and of much higher prices at the pump.
The impact of the housing slump is clear to see in the building material and garden equipment category that is now plumbing new lows for year-over-year declines, dropping 1.6 percent in March and down 6.9 percent from year ago levels.
A housing boom gone bust will tend to have that effect - all of a sudden $1,500 backyard barbeques and $2,000 gurgling water fountains that were "must haves" just a couple years ago don't seem all that important when it costs over $100 to fill up your Escalade and your home equity line of credit was just frozen.