The U.S. Census Bureau has just released its figures for retail sales in July. Retail sales for July grew only 0.4 percent overall from June and are up 5.5 percent since July of last year. This was below previous estimates. Most economic data is pointing to a slower recovery. Consumer prices also saw a slight uptick. Consumer prices are being watched closely by economists, as many fear deflation due to rising costs of goods, and lower employment might be on the horizon.
Slight bump for retail sales
There was a slight increase in retail sales for July. The U.S. Census Bureau reported a gain of 0.4 percent for the month, but that isn’t a complete picture. Discretionary spending, or goods like electronics and jewelry fell by 0.42 percent. 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 percent.
Auto sales make up most of the gains
Ford and General Motors are returning to making profits, which accounts for a boost of car sales in the retail sales figures. The increase in the retail sales were from cars and naturally, gas, according to Bloomberg. All other categories of retail sales combined for a loss of 0.1 percent. Consumer prices also ticked higher. The Consumer Price Index saw an increase of 0.3 percent.
Keeping an eye out for deflation
The recovery is going slower than people would like, and unemployment is still hovering around 10 percent. The Federal Reserve is trying to avoid deflation. Fewer people are fully employed, and less wealth is being held in housing. The indicators seem to point to cautious consumers, as less spending and more saving seem to be the orders of the day.
More information on this topic
CS Monitor: http://csmonitor.com/Money/Paper-Economy/2010/0813/Retail-sales-up-in-July
Wall Street Journal: http://blogs.wsj.com/marketbeat/2010/08/13/price-retail-sales-data-arrive-in-line-with-expectations/
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