U.S. Retail Sales Improve In June – US-FOREX.US
Retail sales met expectations in June, but there’s still a long way to go before economic recovery.While the figures were in line with estimates, the U.S. Commerce Department found the June rise of 0.6% was mostly due to higher gas prices and auto sales. Further examination reveals an increase of only 0.3% when excluding motor vehicles.Core retail sales, which also exclude sales at building materials stores, fell 0.1% in June, marking the fourth consecutive month of declines. Though the core number hit expectations, Mike Feroli, senior economist at JPMorgan Chase, argues the data are still abysmal.”The weakness in core retail sales is especially disconcerting given the amount of public income support being disbursed to consumers,” Feroli said. Despite the figures, the SPDR S&P Retail
exchange-traded fund rose 1.3%, or 35 cents, to 267.67; and the Consumer Discretionary SPDR
ETF rose 1.2%, or 27 cents, to 22.73; while the Vanguard Consumer Discretionary
ETF gained 1.1%, or 39 cents, to 35.44. Retailers like Urban Outfitters
also moved up 1.0%, or 21 cents, to 20.57, and entertainment conglomerate Walt Disney
lifted 1.5%, or 33 cents, to 23.03.
The retail sales report contributes to a recent spate of muted consumer spending-related data. On Tuesday, the Credit Union National Association Survey found consumers are refusing new forms of credit and are instead favoring savings. Last week, the Reuters/University of Michigan Survey of Consumers found confidence fell to 64.6 in July, well below analyst expectations, as well as June’s 70.8 reading. Americans have been struggling financially because of continued economic weakness, rising unemployment and eroding wealth. For example, family wealth in the U.S. dropped by 16 billion by the end of March 2009, from its peak in June 2007, marking the fastest rate of decline in any 21-month period since the data were compiled in 1952.