Wednesday, September 15, 2010

Breaking Down the Retail Sales Numbers

Roubini Global Economics reports:
Nominal retail sales in the U.S. grew by 0.4% m/m in August 2010. The headline number reflects a 0.7% drop in auto sales and a 1.9% pickup in sales at gasoline stations. Meanwhile, sales in the core category—excluding autos, gasoline and building supplies—rose 0.6% in August. This dovetails with an increase in chain store sales in August, driven by deep discounts from retailers during the back-to-school shopping season. Weekly chain store sales indexes still suggest weak sales in Q3 2010. (More here)
This falls in line with Austrian Business Cycle Theory patterns expected during the downturn phase of the business cycle. Capital goods (e.g. auto sales) are down, consumer sales (e.g. gasoline and back to school) are up.

Further, the deep discounts by retailers continue to indicate a strong desire to hold cash---meaning continued fear and uncertainty.

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