The Omni Intelligencer

Sell your house faster for more. auction-style-property-sale
  Saturday, August 01, 2015  Home > Money > Economy > US Economy > U.S. November retail sales played a role in boosting the economy
Follow us on Twitter
Every Dollar Helps
Donate using PayPal
Amount:

U.S. November retail sales played a role in boosting the economy

| More

Media hype concerning records set by retailers on Black Friday and Cyber Monday may have led to unrealistic expectations of how strong the November retail sales report from the Census Bureau would be.

The total dollar volume pulled ahead 0.2% month to month, which was respectable but not outstanding.

On a year-over-year basis, however, the increase was +6.7%. That’s a significant advance and should not be too readily dismissed.

A year-over-year total retail sales figure of +5.0% or higher, when prices are relatively restrained (such as now), is a cause for celebration.

It means the consumer spending component of gross domestic product (GDP) is doing its part to boost overall economic activity in the country.

Personal consumption expenditures account for 70% of GDP in the U.S.

It’s interesting to note the retail sub-categories where the year-over-year gains in sales have been greater than for the sector as a whole.

In the latest month, sales by motor vehicle and parts dealers were +7.5% compared with November of last year.

Furthermore, momentum stayed strong. The month-to-month change was +0.5%.

Sales at the gas pump were +12.9% year over year. That was an outsized increase and was mainly due to higher prices. Remember that the retail sales figures are reported in current dollars, not constant.

In other words, there is no adjustment for inflation in the dollar amounts reported.

Consumers are starting to get a break with respect to the price of gasoline. Whereas earlier this year, gas prices were nearly +40% year over year, they have moderated to +20%.

Gasoline prices have taken a zigzag path in 2011. At various times, the Arab Spring has cast uncertainty on the availability of global oil supplies.

At the onset of the uprising in Libya, and in the midst of the ensuing conflict, there were actual supply disruptions to fields supplying customers in Europe.

The world price of oil became elevated for a while, climbing above $110 U.S. per barrel for West Texas Intermediate and $120 for Brent crude.

When the outcome in Libya became clearer, the world price of oil slid all the way back into the high $70 range. It has now returned close to $100 per barrel.

U.S. non-store retail sales in the latest month were +13.9% year over year. This is the category where Internet sales and catalogue shopping appear.

Both non-store sales (+1.5%) and electronic and appliance store sales (+2.1%) surged in November compared with October, which is consistent with the aforementioned reports on post-Thanksgiving Day sales targets being exceeded.

The willingness of Americans to spend money is a bit of a surprise, given the alleged belt-tightening that was supposed to be occurring.

What’s perhaps most noteworthy is the dichotomy between retail spending and the acquisition of residences.

While Americans seem willing to hand over money for everyday items, the much larger commitment to a new home is still in abeyance.

One is encouraged to speculate that it may not be long before this situation turns around.

Interest rates are at record lows. Home prices offer incredible once-in-a-lifetime bargains.

There may still be a lot of empty foreclosed homes on the market, but there are also many deteriorating homes that are demolished each year, reducing available inventory.

The homebuilding sector will tell you the current problem with demand is too many people being turned down for mortgage applications.

This is the aftermath of banks being worried about their solvency.

As the economy continues to chalk up better employment numbers, the extreme caution of lenders will gradually be relaxed

Retail has recovered. Look for a soon-to-be-steady improvement in the U.S. housing sector.

The timing could not be more fortuitous.

With Europe continuing to struggle and China appearing to have some slowing-growth issues of its own, the U.S. may finally be putting a boot in the stirrup.

The world would like to see the American cavalry officer mount up once again and come to its rescue.

 

U.S. retail sales – three months smoothed
U.S. retail sales – three months smoothed
*"Year over year" is each month versus the same month of the previous year.
Based on latest three-month averages of current dollar adjusted data (and placed in latest month). 
Adjustments are for seasonal variation, holiday and trading day differences, but not for price changes.
Data source: U.S. Census Bureau (Department of Commerce).
Chart: Reed Construction Data - CanaData.

U.S. construction-related retail sales – three months smoothed
U.S. construction-related retail sales – three months smoothed
*"Year over year" is each month versus the same month of the previous year.
Based on latest three-month averages of current dollar adjusted data (and placed in latest month). 
Adjustments are for seasonal variation, holiday and trading day differences, but not for price changes.
Data source: U.S. Census Bureau (Department of Commerce).
Chart: Reed Construction Data - CanaData.

U.S. retail sales – three months smoothed
U.S. retail sales – three months smoothed
Data source: U.S. Census Bureau (Department of Commerce).
Chart: Reed Construction Data - CanaData
.
Article source: Reed Construction Data

Sell your house faster for more. auction-style-property-sale
| More
 
  • Pacific Rim free trade talks fall short of deal 1 Aug 2015 | 1:54 am

    Japanese Economy Minister Akira Amari and US Trade Rep. Michael Fromam participate in a press conference in Lahaina, Maui, HawaiiBy Ami Miyazaki and Krista Hughes LAHAINA, Hawaii (Reuters) - Pacific Rim trade ministers failed to clinch a deal on Friday to free up trade between a dozen nations after a dispute flared up over auto trade between Japan and North America, New Zealand dug in over dairy trade and no agreement was reached on monopoly periods for next-generation drugs. Trade ministers from the 12 nations negotiating the Trans-Pacific Partnership, which would stretch from Japan to Chile and cover 40 percent of the world economy, fell just short of a deal at talks on the Hawaiian island of Maui but were confident an agreement was within reach. "The undergrowth has been cleared away in the course of this meeting in a manner that I would say is streets ahead of any of the other ministerial meetings that we have had," New Zealand Trade Minister Tim Groser said.


  • Japan's Amari: TPP member nations clash over intellectual property issue 1 Aug 2015 | 12:11 am

    LAHAINA, Hawaii(Reuters) - Japanese Economy Minister Akira Amari said on Friday each nation's interests clashed over an intellectual property issue and they could not reach a Pacific Rim trade deal.

  • Pacific trade ministers fail to reach deal in Hawaii talks 1 Aug 2015 | 12:06 am

    Ministers from 12 nations negotiating a Pacific Rim trade pact hold a news conference in Lahaina, Hawaii, Friday, July 31, 2015, saying they made significant progress in reaching an agreement. The ministers, from left, are Australia Minister for Trade and Investment Andrew Robb, Brunei Second Minister for Foreign Affairs and Trade Lim Jock Seng, Canada Minister of International Trade Ed Fast, Chile Director General of International Relations Andres Rebolledo, Japan Economic and Fiscal Policy Minister Akira Amari, U.S. Trade Representative Michael Froman, Malaysia Minister of International Trade and Industry Mustapa Mohamed, Mexico Secretary of the Economy Ildefonso Guajardo Villarreal, New Zealand Minister of Trade Tim Groser, Peru Minister of Foreign Trade and Tourism Magali Silva and Singapore Minister for Trade and Industry Hng Kiang Lim. (AP Photo/Audrey McAvoy)LAHAINA, Hawaii (AP) — Trade ministers from a dozen Pacific Rim nations failed to reach a deal on a new trade agreement that would cover nearly 40 percent of the global economy, U.S. Trade Representative Michael Froman said Friday.


  • China's manufacturing shows zero growth in July 31 Jul 2015 | 11:08 pm

    BEIJING (AP) — China's manufacturing recorded no growth in July, in a sign of weakness in the world's second-largest economy, according to data released by an industry group on Saturday.

  • On Army Day, China warns of growing border security risks 31 Jul 2015 | 10:50 pm

    Soldiers of China's PLA patrol in temperatures below minus 10 degrees Celsius at China's border with Russia in HeiheChina says it is a threat to nobody, but needs to update outdated equipment and has to be able to defend what is now the world's second largest economy. "The maritime security environment is more complicated, and the undercurrents in the East and South China Seas have been gushing up," the paper wrote. China has become increasingly assertive in its dispute with Japan over a group of uninhabited islets in the East China Sea, while in the South China Sea it has been reclaiming land in waters where Vietnam, the Philippines, Taiwan, Malaysia and Brunei all have competing claims.


The fastest and best way to sell real estate.
auction-style-property-sale