One cannot help but laugh at the first line in the Associated Press article Retail sales up slightly in June after May drop : “Consumers spent more on cars and in big chain stores in June but falling gas prices held back retail sales.”
For months on end, everyone has been shouting how rising gas prices have held back retail sales. Today we are told falling gas prices have held back retail sales.
Apparently gas prices hurt retail sales whether they are rising or falling.
Retail Sales Stagnate
Bloomberg reports Retail Sales in U.S. Stagnate as Unemployment Hurts Consumers.
The 0.1 percent increase reported by the Commerce Department in Washington today compared with the median forecast of a 0.1 percent drop in the Bloomberg News survey of 80 economists. Excluding auto sales, purchases were little changed, the weakest performance since July 2010.
Total sales were boosted by an unexpected increase in demand at auto dealers that will not influence figures on consumer spending for the second quarter that the government will publish later this month. Increasing joblessness prompted stores like Target Corp. and Gap Inc. to sweeten discounts to lure customers as a dearth of jobs raises the risk that household purchases will have difficulty picking up for the rest of 2011.
“Consumers are cautious,” said Michelle Meyer, a senior economist at Bank of America Merrill Lynch in New York. “There is still pretty slow momentum. It still shows we’re in a fragile recovery.”
Auto Sales Mirage
Allegedly auto sales are up. I rather doubt they are. Auto sales are counted as soon as cars are shipped to dealers. Inventory stuffing is what is up. It remains to be seen if consumers buy those cars, and at what prices.
Without auto sales, retail sales were flat, following a decline last month. This was a weak set of back-to-back retail sales reports.
Mike “Mish” Shedlock
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