{"id":284,"date":"2014-08-13T10:23:48","date_gmt":"2014-08-13T14:23:48","guid":{"rendered":"http:\/\/naroffeconomics.com\/?p=284"},"modified":"2014-08-13T10:23:48","modified_gmt":"2014-08-13T14:23:48","slug":"july-retail-sales","status":"publish","type":"post","link":"https:\/\/naroffeconomics.com\/?p=284","title":{"rendered":"July Retail Sales"},"content":{"rendered":"

KEY DATA:<\/strong> Total Sales: 0.0%; Excluding Vehicles: +0.1%<\/p>\n

IN A NUTSHELL:<\/strong>\u00c2\u00a0\u00c2\u00a0\u00e2\u20ac\u0153The consumer has taken a holiday from shopping.\u00e2\u20ac\u009d<\/em><\/strong><\/p>\n

WHAT IT MEANS:<\/strong>\u00c2\u00a0Remember the phrase \u00e2\u20ac\u0153shop \u00e2\u20ac\u02dctill you drop\u00e2\u20ac\u009d?\u00c2\u00a0 Well, forget about it.<\/em><\/strong>\u00c2\u00a0 Consumers are not shopping very much at all.\u00c2\u00a0 I often argue that we shouldn\u00e2\u20ac\u2122t expect a major return to the malls (or Internet) until incomes started growing.\u00c2\u00a0 Since incomes are not growing, it is not a major surprise that retail sales would be sluggish. \u00c2\u00a0But this is getting ridiculous.\u00c2\u00a0 For the second consecutive month, households skipped the trip to the store.<\/em><\/strong>\u00c2\u00a0 July retail sales were flat after rising modestly in June.\u00c2\u00a0 We knew that vehicle purchases eased from the robust June sales pace but that is hardly a concern as they are still at a very strong level.\u00c2\u00a0 The real worry is weakness in electronics and appliances, which has been faltering since they surged in the first quarter.<\/em><\/strong>\u00c2\u00a0 A similar trend was also seen in furniture sales. <\/em><\/strong>\u00c2\u00a0It looks like a new vehicle is the only big-ticket item people are buying.<\/em><\/strong>\u00c2\u00a0 Sales at department stores were down sharply, indicating a trip to the mall was not something a whole lot of households did.\u00c2\u00a0 Not every retailer hit the skids in July.\u00c2\u00a0 Supermarkets, restaurants, sporting goods, health care, building materials and clothing stores all posted gains, though they were nothing special.\u00c2\u00a0 \u00c2\u00a0<\/em><\/strong><\/p>\n

MARKETS AND FED POLICY IMPLICATIONS:<\/strong> \u00c2\u00a0People just don\u00e2\u20ac\u2122t seem to be into shopping right now.<\/em><\/strong>\u00c2\u00a0 Undoubtedly, income is an issue.\u00c2\u00a0 But six years of economic uncertainty may be changing spending patterns, at least for a while.\u00c2\u00a0 Consumers are finding they can live without a lot of the stuff they used to buy automatically.\u00c2\u00a0 <\/em><\/strong>Our consumption society bought an awful lot of things that we probably didn\u00e2\u20ac\u2122t need but thought it might be nice to own.\u00c2\u00a0 Just as the Great Depression scarred a generation of consumers, the Great Recession may be modifying the need for things.<\/em><\/strong>\u00c2\u00a0 How long that \u00e2\u20ac\u0153I don\u00e2\u20ac\u2122t need that\u00e2\u20ac\u009d attitude may last is unclear.\u00c2\u00a0 We will not really know until incomes start rising strongly for an extended period.\u00c2\u00a0 But there is a good possibility that the savings rate during this expansion will be higher than during the housing bubble-driven spending boom in the 2000s.\u00c2\u00a0 Savings as a percent of disposable income was on a clear downward trend from 1975 to the beginning of the recession in early 2008.\u00c2\u00a0 Fear and financial necessity drove the rate up.\u00c2\u00a0 It is down somewhat this year but it is still above the average posted from 2000 to 2007.\u00c2\u00a0 Regardless, right now people are just not parting with their hard-earned funds<\/em><\/strong> and that is a concern.\u00c2\u00a0 For the Fed, though, softer retail sales mean more moderate economic growth so there is less need to raise rates.\u00c2\u00a0 That should make investors happy, even as it raises questions about earnings.<\/p>\n","protected":false},"excerpt":{"rendered":"

KEY DATA: Total Sales: 0.0%; Excluding Vehicles: +0.1% IN A NUTSHELL:\u00c2\u00a0\u00c2\u00a0\u00e2\u20ac\u0153The consumer has taken a holiday from shopping.\u00e2\u20ac\u009d WHAT IT MEANS:\u00c2\u00a0Remember the phrase \u00e2\u20ac\u0153shop \u00e2\u20ac\u02dctill you drop\u00e2\u20ac\u009d?\u00c2\u00a0 Well, forget about it.\u00c2\u00a0 Consumers are not shopping very much at all.\u00c2\u00a0 I often argue that we shouldn\u00e2\u20ac\u2122t expect a major return to the malls (or Internet) until … Continue reading July Retail Sales<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,12],"tags":[],"class_list":["post-284","post","type-post","status-publish","format-standard","hentry","category-economic-indicators","category-retail-sales"],"_links":{"self":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/284","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=284"}],"version-history":[{"count":1,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/284\/revisions"}],"predecessor-version":[{"id":285,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/284\/revisions\/285"}],"wp:attachment":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=284"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=284"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=284"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}