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Economy in Brief

U.S. Retail Sales Rise As Core Sales Improve Again
by Tom Moeller November 16, 2009

Consumers seem to be gaining back the inclination to spend. Retail sales last month rose 1.4% after a 2.3% September decline that was deeper than reported initially. A 0.9% October gain was the Consensus expectation. The increase improved the y/y change in sales to -1.7% from declines of roughly 10% earlier this year. Moreover, spending on "core" retail sales has improved. Month-to-month changes in overall sales in recent months have been quite volatile due to auto sales promotions and rising gasoline prices. Aside from these distortions, gains in consumer spending have been steady during the last three months and y/y growth also improved. The retail sales data are available in Haver's USECON database.

Auto sales of late have been influenced by Detroit's sales programs. Last month, retail sales of motor vehicles jumped 7.4% after a 14.3% decline during September and a 10.2% August jump. Less autos, sales rose 0.2% versus a 0.4% expected gain. Higher gasoline prices also have influenced overall sales growth. Without autos & gasoline, retail sales rose 0.3% last month, about as they did during the prior two months. These gains raised the y/y change to -0.8% from -4.4% as of July.

In soft goods, the 0.4% increase in apparel store sales was the fourth gain in as many months and the y/y change of 1.5% was improved from -9.7% during December. Finally, improvement in sales at furniture, electronics & appliance store sales has been less impressive. Sales fell 0.7% last month and the y/y change improved only to -7.3% from -14.3% at its worst. Furniture store sales alone fell 0.8% (-7.6% y/y) after two months of increase while sales of electronics & appliances slipped 0.6% (-7.0% y/y), also after two months of increase.

Internet and catalogue purchases were firmer and rose 1.0% (1.6% y/y). The gain contrasted with a 7.6% y/y decline as of April. Finally, restaurant sales jumped 1.2% (1.5% y/y) after little change either m/m or y/y as of September. Finally, building materials sales continued their slump and fell 2.4% (-15.0% y/y).
  October September August Y/Y 2008 2007 2006
Retail Sales & Food Services (%) 1.4 -2.3 2.4 -1.7 -0.8 3.3 5.3
  Excluding Autos 0.2 0.4 0.8 -2.6 2.5 3.9 6.3
    Less Gasoline 0.3 0.3 0.4 -0.8 1.6 3.6 5.7
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