Post by unlawflcombatnt on Jul 13, 2007 16:10:04 GMT -6
Junes's Retail Sales report showed a much worse-than-expected decline of -0.9% (the prediction was for only a -0.1% decline). June's Retail Sales, excluding autos, showed a decline of -0.4%, while the prediction had been for a +0.4% increase.
This was the largest decline in Retail Sales in 2 years.
In terms of "real" dollars, the 12-month (June to June) increase in Retail Sales was less than 1.5% {based on an 11-month increased from June 2006 to May CPI of 2.5% (June's CPI is not available yet.)}
The Retail Sales report roughly parallels the "sales" portion of today's Business Inventory report. In the 12 months from May 2006 to May 2007, Business Sales increased 4% (in current dollars), from $1,072.137 billion to $1,115.108 billion. When adjusted for a May to May CPI increase of 2.7%, this becomes only a 1.3% "real" dollar increase in Business Sales over the last year. These numbers can be seen in the chart below from the Census Bureau.
BUSINESS SALES & INVENTORIES
Again, the above shows the parallel in the annual change in Business Sales (which is similar to the change in Retail Sales).
Returning to the Retail Sales report, on a quarterly basis, June's total of $373.946 billion is only +0.3%, or $1.085 billion, above March's $372.851. However, this is in current dollar amounts, and has not been adjusted for inflation.
The Consumer Price Index increased 1.26% over the 2 months from March through May. Adjusting only for inflation in April and May, June's inflation-adjusted numbers becomes only $369.276 billion. This is less than March's $372.851 billion,
making the "real", inflation-adjusted 2nd quarter change in Retail Sales -1.25%.
Retail Sales compose about 50% of Consumer Spending. Given that Consumer Spending is now 70% of our economy, a quarterly Retail Sales decline of -1.25% in real dollars puts a huge drag on 2nd quarter GDP. In fact, it makes a GDP decline likely. Over the longer term, a 12 month "real" increase in Retail Sales of less than 1.5% indicates a significant slowdown in the economy.
Despite the "irrationally exuberant" stock market increases, the economy itself is not doing well.
This was the largest decline in Retail Sales in 2 years.
In terms of "real" dollars, the 12-month (June to June) increase in Retail Sales was less than 1.5% {based on an 11-month increased from June 2006 to May CPI of 2.5% (June's CPI is not available yet.)}
The Retail Sales report roughly parallels the "sales" portion of today's Business Inventory report. In the 12 months from May 2006 to May 2007, Business Sales increased 4% (in current dollars), from $1,072.137 billion to $1,115.108 billion. When adjusted for a May to May CPI increase of 2.7%, this becomes only a 1.3% "real" dollar increase in Business Sales over the last year. These numbers can be seen in the chart below from the Census Bureau.
BUSINESS SALES & INVENTORIES
Again, the above shows the parallel in the annual change in Business Sales (which is similar to the change in Retail Sales).
Returning to the Retail Sales report, on a quarterly basis, June's total of $373.946 billion is only +0.3%, or $1.085 billion, above March's $372.851. However, this is in current dollar amounts, and has not been adjusted for inflation.
The Consumer Price Index increased 1.26% over the 2 months from March through May. Adjusting only for inflation in April and May, June's inflation-adjusted numbers becomes only $369.276 billion. This is less than March's $372.851 billion,
making the "real", inflation-adjusted 2nd quarter change in Retail Sales -1.25%.
Retail Sales compose about 50% of Consumer Spending. Given that Consumer Spending is now 70% of our economy, a quarterly Retail Sales decline of -1.25% in real dollars puts a huge drag on 2nd quarter GDP. In fact, it makes a GDP decline likely. Over the longer term, a 12 month "real" increase in Retail Sales of less than 1.5% indicates a significant slowdown in the economy.
Despite the "irrationally exuberant" stock market increases, the economy itself is not doing well.