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Tuesday, July 14, 2009

June Retail Sales in Perspective

Traveling all week for the real job, so posting may come late (but better than never right?).

After the early cheerleading following the release of the retails sales data that showed a jump of 0.6% in June (expectations were for 0.5%), a deeper analysis showed while the number was positive, we still have a LONG way to go.

Joshua Shapiro of MFR Inc. ( via WSJ) puts the number in perspective:

That nongasoline retail sales were little changed in aggregate on a month-to-month basis over the latest three months in spite of the tax cut that was implemented starting in April can hardly be described as a good showing. Rather, it is clear that this fiscal boost is mostly being used to help fill the hole left by a decimated labor market and/or to help households whittle down debt burdens.
Digger deeper, we see that of the five areas that showed an increase in sales during June, four of them were in the areas with some of the largest year over year declines (i.e. a bounce off of a massive cliff dive).

And the two biggest areas of growth? Autos and gasoline. After the "massive" jump we are back at Summer of 1998 and Summer of 2005 levels respectively.

Source: Census