Retail sales are not rising as fast as envisioned

The US Census Bureau has just released its figures for the retail sales in July. The Census Bureau observed that retail sales for July grew about 0.4 percent from June and had grown 5.5 percent since June of 2009. The increase was not as big as they had been projected to be. Economic indicators are pointing toward a slower recovery. Consumer prices also rebounded slightly after various months of slight decline. Consumer prices are being watched closely, as increasing prices and decreasing incomes and assets are signs of deflation.

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There was a slight increase in retail sales for July. The U.S. Census Bureau reports that retail sales as a whole increased by 0.4 percent for July, but that figure could be somewhat misleading. There was a 0.42 percent drop in discretionary spending, on things for instance appliances, furniture and so forth, fell 0.42 percent for the month of July. Discretionary spending is up 2.77 percent from a year ago, according to the Christian Science Monitor. According to the Wall Street Journal, retail sales had fallen in May and June of this year, as May had a dip of 0.3 percent and June slid a further 1.0 percent.

The modest gain was spurred by auto sales

Ford and General Motors are returning to making profits, which accounts for a boost of auto sales in the retail sales figures. The bulk of the retail sales increases, as outlined by Bloomberg, were due to sales of automobiles and also the gas necessary to drive those new vehicles around. All other purchases combined for a drop of 0.1 percent. Consumer prices also ticked higher. There was a gain of 0.3 percent within the Consumer Price Index, which means the cost of living is increasing when more people are unemployed and underemployed.

Watching for signs of deflation

The unemployment rate is still almost 10 percent, and recovery is progressing slowly. The Federal Reserve is at the moment looking for signs of deflation, which is where prices of goods increases when less money is available to go around. Less wealth is held in housing, and fewer people are employed fully. The indicators seem to point to cautious consumers, as less spending and more saving appear to be the orders of the day.

Citations

CS Monitor

csmonitor.com/Money/Paper-Economy/2010/0813/Retail-sales-up-in-July

Wall Street Journal

blogs.wsj.com/marketbeat/2010/08/13/price-retail-sales-data-arrive-in-line-with-expectations/

Bloomberg

bloomberg.com/news/2010-08-13/retail-sales-in-u-s-increased-0-4-in-july-less-than-economists-forecast.html