Tuesday, July 14, 2009
The Census Bureau reported that sharply higher gasoline prices and improved automobile sales pushed retail sales 0.6 percent higher in June, up from a 0.4 percent increase in May, the best reading on the broadest measure of consumer spending in five months.
Excluding automobiles and gasoline, however, sales declined for the fourth straight month in yet one more reminder that this sector remains weak, cautious consumers continuing to reduce discretionary purchases and favoring essentials such as food and fuel.
Gasoline station sales soared 5.0 percent in June after a similar increase in May, during which time the cost of unleaded gasoline increased from just above $2.00 a gallon to a high of $2.69 a gallon two weeks ago. From year ago levels, when the price at the pump was over $4 a gallon, gasoline station sales are now down 31.6 percent.
As has been the case since the middle of the decade, this volatile component of the retail sales data has an outsized impact on the headline number, often producing misleading results.
Sales at auto dealerships and parts stores rose 2.3 percent last month, the biggest increase since January, however, this comes after dramatically lower sales earlier in the year, overall auto sales still down more than 15 percent from this time last year. Both Chrysler and General Motors have experienced declines of two to three times this amount after entering and exiting bankruptcy.
After sales at building material and garden equipment stores posted a 0.4 percent rebound in May, the first monthly increase in 11 months, the long-term trend reasserted itself in June and sales declined 0.9 percent.
Business at such well-known stores as Lowes and Home Depot is now down 13.0 percent from a year ago with little hope for a major rebound as the nation's housing market continues to search for a bottom.