Perhaps we were simply letting two months of gains cloud our thinking, or perhaps the situation was simply not as good as hoped. No matter what the reason, experts had believed that retail sales would increase by 0.2% in March. WRONG! Sales dropped to a seasonally adjusted 1.1% during March according to the Commerce Department. The fall in consumer spending is more disappointing given the fact that the economy had shown some signs of life. Furthermore, first-quarter retail sales fell 1.2% from last year's fourth quarter sales, indicating that real consumer spending may have slipped again in the first quarter of 2009 following the 4% plunge in the last half of 2008.
There is a glimmer of hope for some, as a late Easter may have pushed some holiday-related sales into April rather than March (when these sales usually take place). That said, the government does its best to adjust for the late holiday, but economists believe April and March need to be averaged together to get a real picture of sales.
The only sectors that showed gains were sales at food stores and personal care stores. Elsewhere, the largest drop came from sales of electronics and appliances, which fell 5.9% in March.
With futures pointing lower ahead of this news, I can't imagine that this announcement will act as a catalyst for gains. In fact, I expect quite the opposite -- watch for this news to help pull the market lower.
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Reader Comments (Page 1 of 1)
4-14-2009 @ 11:58AM
Iridium said...
See in the real world where people actually need money to buy things, the situtation isn't that good.
In the fantasy world of Wall Street where accountants can pretty much make the books look like anything they want, the picture is a bit rosy.
All of the corporate earnings reports are bogus. The real situation is that working people are only buying essentials. Kids are buying what they always do becuase they do not have to pay for rent or a mortgage.
Auto sales fell even further even with all of the incentives that are now at the highest level in history. If you can't afford to buy a car when you can get 0% 72 month financing at invoice price. How will you ever be able to afford it when prices and interest go back to normal.
4-14-2009 @ 2:15PM
clikdawg said...
"Perhaps we were simply letting two months of gains cloud our thinking ... "
Ya think?
And whaddya mean "we"?