Wikinvest Wire

Retail sales surge on auto purchases

Tuesday, September 15, 2009

The Commerce Department reported that retail sales during the month of August rose at their fastest pace in three-and-a-half years, largely due to sharply higher automobile sales aided by the U.S. government's wildly popular "Cash for Clunkers" program.
IMAGE After a downwardly revised decline of 0.2 percent in July, overall retail sales jumped 2.7 percent in August, far exceeding the consensus estimate of about 2.0 percent, confirming the huge impact that the auto purchase incentive had over the summer.

Excluding motor vehicles, retail sales rose 1.1 percent last month and, after stripping out gasoline station sales, consumers purchased just 0.6 percent more than the month before. While this is an improvement to be sure, it is part of a data series that has been hovering around zero since plunging last fall and, clearly, the temporary combination of higher auto sales and higher gasoline prices do not signal a dramatic change in the behavior of the American consumer.

Aside from automobile and gasoline sales, the clothing category saw the biggest improvement, up 2.4 percent for the month, and sporting goods sales were not far behind with a gain of 2.3 percent in August.
IMAGE Furniture and building material sales continued to fall, down 1.6 percent and 1.2 percent, respectively, and serve as ongoing reminders of the impact of the burst housing bubble on consumer demand in housing-related sectors.

Obviously, the real test in the consumer sector will come next month when September retail sales are reported, a total that will not have the benefit of a multi-billion government stimulus program to spur demand. Thus far, auto dealers appear to be struggling mightily in the absence of $4,500 rebate checks being written in Washington.


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Frank Fitton said...

It is starting to seem like almost every day we get a sign that maybe our country is getting out of the recession, only to be followed by another sign that we continue to linger in the recession. That being said, positive signs are always welcome and today we got another one.

Now we’re nowhere near where we really want to be, but at least we got a possible start going here. A 1 month spike can certainly not be called a trend, but no one can say that it’s not possibly the beginning of a trend. At this point it’s nice to have that hope to hang our hat on.

Check out my blog on the increase in retail sales at…..

staghounds said...

No s#$%^, Sherlock- add $3,000,000,000 of magic free money to retail sales in two weeks and retail sales go sharply up.

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