Summer spending buoyed by tax refund checks? I know I got my check in early July.
In any event this will be an aberration. Only late filers (mostly rich people) will be getting checks from here.
What we need are JOBs, plain and simple.
Retail Sales in U.S. Climbed in July by Most in Four Months
Aug. 12 (Bloomberg) — Retail sales in the U.S. climbed in July by the most in four months, showing consumers are holding up even as employment slows.
The 0.5 percent increase reported by the Commerce Department in Washington today matched the median forecast of 81 economists surveyed by Bloomberg News and followed a 0.3 percent increase in June that was larger than previously estimated. Excluding auto sales, purchases rose more than projected.
More Americans drove away from auto dealerships in new cars last month as an easing of supply-chain constraints caused by Japan’s March disasters provided consumers with more variety and better pricing. Even so, Federal Reserve policy makers this week said they were concerned that household spending had “flattened out” and the recent plunge in stocks is hurting confidence.
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 yesterday.
Economists’ estimates ranged from increases of 0.1 percent to 1.5 percent. Non-auto sales were projected to rise 0.3 percent, according to the survey median.
Nine of 13 major categories showed a gain in sales last month, led by electronics stores, furniture retailers, auto dealers and service stations.
Excluding automobiles and service stations, sales climbed 0.3 percent after a 0.5 percent gain in June that was larger than previously estimated.
Excluding autos, gasoline and building materials, which are the figures used to calculate GDP, sales rose 0.3 percent after a 0.4 percent gain the prior month.
Auto sales showed a 0.4 percent increase. Cars and light trucks sold at a seasonally adjusted pace of 12.2 million in July, up from 11.4 million in June yet trailing the 12.5 million average pace through the first half, Autodata Corp. said. Deliveries at Detroit-based GM climbed 7.6 percent from the same month in 2010 to 214,915.
“Although the economy has clearly lost some momentum, we do believe that it will continue to recover, but more gradually than we had originally anticipated as we move through the second half of the year,” Don Johnson, GM’s vice president of U.S. sales, said on an Aug. 2 conference call. Moderating gas prices have “provided some needed relief to consumers.”
Retailers, including Macy’s Inc. and Limited Brands Inc., reported July sales that exceeded analysts’ estimates. Purchases at Macy’s rose 5 percent, surpassing the 4.4 percent average projection compiled by Retail Metrics Inc. Limited, operator of the Victoria’s Secret chain, posted a gain of 6 percent from a year earlier.
The economy expanded at a 1.3 percent annual rate in the second quarter of 2011, less than forecast, from a 0.4 percent pace in the first three months of the year, Commerce Department figures showed last month. Household spending rose at 0.1 percent pace in the second quarter, the weakest since the same period in 2009.
Fed policy makers on Aug. 9 said economic growth this year had been “considerably slower” than expected. What’s more, “temporary factors,” including Japan’s disaster and high fuel costs, likely accounted for “only some of the recent weakness in economic activity,” they said.
They announced this week that they would hold their benchmark lending rate near zero at least through mid-2013 to spur the economy.
The labor market is struggling. The economy added 117,000 jobs in July, bringing the average gain in payrolls over the past three months to 111,000, a Labor Department report showed Aug. 5. That was about half the 204,000 increase on average in the first four months of the year.
To contact the reporter on this story: Bob Willis in Washington at bwillis
To contact the editor responsible for this story: Christopher Wellisz at cwellisz
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