The economy is in a muddled place right now and not much seems to make sense. On Saturday afternoon, I was at Christiana Mall and the number of visitors was significant. On Sunday, I decided to play nine holes of golf in the late afternoon and upon arriving at a local club at 3:00 pm, I was told they were booked until 5:10 pm! So off to the driving range I went and that too was crowded. How fast is the economy really slowing down?
"Padded by high savings and rising wages, American households
are spending nearly as much money as they did earlier, but largely
to keep up with higher prices, not to actually buy more stuff.
That said, today's report may cool talk of a near-term recession."
- Sal Guatieri, Senior Economist, BMO Capital Markets
In a
recent story from Reuters, retail sales increased 1.0% in June and May figures were revised up. Manufacturing numbers dropped slightly in June and that follows softening numbers in May. With the Fed poised to possibly raise interest rates again in a couple of weeks, it comes as no surprise that capital intensive businesses will feel the pinch first. “The nearly broad increase in retail sales last month was led by receipts at auto dealerships, which rebounded 0.8% after declining 3.0% in May amid shortages. Sales at service stations increased 3.6%. Gasoline prices surged in June, averaging above $5 per gallon, according to data from motorist advocacy group AAA. Prices at the pump have since declined from last month's record peaks and were averaging $4.577 per gallon on Friday.
Receipts at bars and restaurants, the only services category in the retail sales report, increased 1.0%. There were strong gains in sales at furniture and electronics and appliance retailers. Receipts at sporting goods, hobby, musical instrument, and bookstores also rose. Online store sales rebounded 2.2%. But sales at building material, garden equipment and supplies stores fell as did those at clothing retailers.”
