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Retail Sales Gain Amid the Gloom

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Posted on Aug 12, 2011
Flickr / coolinsights (CC-BY)

Retail sales were up in July by the most they’ve been in four months, a sign that consumers in general remain confident despite lagging employment, according to the Commerce Department.

The positive news gave investors on Wall Street a boost in confidence too, helping push the stock market to strong early gains on Friday.

But it is still much too soon to celebrate the economy, especially with officials at the Federal Reserve voicing concern that household spending has “flattened out,” something that has never happened outside a recession. —BF

Bloomberg News:

The gain in spending is “pretty relieving,” said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York. “The upward revisions suggest that the trajectory of consumer spending heading into the third quarter wasn’t as bad as previously thought.”

Stock-index futures extended earlier gains after the report. The contract on the Standard & Poor’s 500 Index rose 0.8 percent to 1,178 at 8:42 a.m. in New York. Treasury securities also climbed, sending the yield on the benchmark 10-year note down to 2.29 percent from 2.34 percent late [Thursday].

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Lafayette's avatar

By Lafayette, August 14, 2011 at 6:18 am Link to this comment

From the Bureau of Economic Analysis for July:

Personal consumption expenditures (PCE) decreased $21.9 billion, or 0.2 percent.

This is a key leading indicator for creation of jobs.

Not yet, folks … and not ever if the Replicants cut government spending.

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By Gmonst, August 12, 2011 at 4:22 pm Link to this comment

Having retail sales increase the most in July out of the last four months is not really that impressive to this non-economist.  Especially when July is the height of the summer season and summer spending.  I think Robespierre115 nailed it.  People will keep consuming no matter what their financial situation.  They will downgrade a lot of things like smaller housing and skipping vacations so they can keep buying new stuff.

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By Tom Semioli, August 12, 2011 at 12:28 pm Link to this comment
(Unregistered commenter)

If all but one retail outlet goes out of business in a
community, and the one remaining retail outlet makes a
sale - I guess you’d have to report that retail sales
are up. Any news on Santa Claus or the Easter Bunny?

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Robespierre115's avatar

By Robespierre115, August 12, 2011 at 12:16 pm Link to this comment

All this means is that consumerist Americans haven’t lost the habit of consuming. Out here in the Central Valley in California you find people who pick vegetables for a living still obsessing over getting $400 glasses, iPhones and new cars.

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By SarcastiCanuck, August 12, 2011 at 11:50 am Link to this comment
(Unregistered commenter)

Maybe the spike is due to depressed citizens going on shopping sprees to alleviate thier blues.Do you know how much of the upturn is credited to booze sales?

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By TDoff, August 12, 2011 at 9:42 am Link to this comment

Could it be that the reason retail sales are up is because more and more consumer/citizens are catching on to how to play the game, US-style, and are incorporating themselves as Banks, so they can get free money from the Fed? And are now blowing it on $4000 boots and $200 dinners?

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