Thursday, August 13, 2009
The Commerce Department reported(.pdf) that, after rising 0.8 percent in June, retail sales fell 0.1 percent in July, disappointing analysts who were expecting a gain of 0.8 percent.
The wildly popular "Cash for Clunkers" program saw motor vehicle sales surge 2.8 percent, but broad declines in other categories pulled overall sales lower, paced by a 2.1 percent decline in sales at home building material and garden equipment stores.
Gasoline station sales also declined 2.1 percent, but this was largely due to lower prices at the pump during the July reporting period.
Excluding motor vehicles and parts, sales fell well short of the consensus estimate of a 0.1 percent gain, down 0.6 percent in July after rising 0.5 percent the in June.
On a year-over-year basis, retail sales are now down 8.5 percent.
The fallout from the bursting of the housing bubble is clear to see in the ongoing sales decline at building material and home improvement stores as, aside from volatile gasoline station sales, this category is worse than any other on an annual basis, down 14.7 percent from a year ago.
Interestingly, sales at electronics and appliance stores are down 14.6 percent from a year ago, presumably due to a lagging household appliance sector rather than consumer electronics such as iPhones and iPods which still seem to be flying off of the shelves.
It's hard to imagine how a bigger bubble than the housing bubble could ever be created as this particular bubble had so many second-order effects on the economy, the area shaded in gray in the graphic above being one of the major ones.