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The Good News On Retail Sales

Tuesday, 14 September 2010 14:28

The media are anxious to find good economic news, hence they seized on the August retail sales data as evidence that the economy is moving forward again. While the 0.6 percent reported growth in non-auto sales is somewhat better than expected, it is somewhat less impressive when we remember that the July data were revised down by 0.1 percentage point.

Also, much of the growth was driven by higher gasoline sales, which is most likely due to higher prices rather than more consumption. Non-auto, non-gas sales were 0.5 percent higher than in August than in July and just 0.3 percent about the June level. This is not exactly robust growth.

Comments (5)Add Comment
written by bailey, September 14, 2010 8:01
It would be nice to know if increase is consumption or cost. The info is there for the asking, is the problem that the FED doesn't want to know? Anyone else curious about suv selling price increases over the last two years?
written by Queen of Sheba, September 14, 2010 8:34
The price of gasoline has been dropping this summer, at least here in Texas and Oklahoma. It's dropped 30 cents/gallon in the past two months - 20 cents of that in a two-week period - and it's still going down as of today. Good thing for all those new SUV purchasers; not so good for the environment.
Gas Prices Going Down?
written by Ron Alley, September 15, 2010 7:02

I am not a reservoir of economic data, but my recollection of hearing about gasoline prices is that, through July, prices had been relatively flat. My understanding is that gasoline prices have a strong seasonal variation. So, it's difficult for me to spot a trend just by trying to remember what price I paid when I filled up six months ago. That is, if the price of gasoline had dropped to the point that I actually could afford a fill up.
at this point, no news is good news
written by frankenduf, September 15, 2010 8:18
even so, mall purchases 1, unemployed joe 0 is not a scorecard to get excited about
written by Queen of Sheba, September 15, 2010 1:38
I drive 12,000-15,000 miles per year and must track mileage and gas purchases for business purposes. Summers always frighten me, because the price of gasoline usually goes through the roof as vacationers take to the road. This year that price run-up did not happen; after a small increase in June, prices in July did indeed remain flat. And from the latter part of July to the present they have fallen. I had to fill up yesterday, at a station next to an exit ramp on an interstate highway no less, and the pump price was three cents/gallon less than I paid at the station in my neighborhood last week. Eerie, maybe, but true, although prices usually begin falling after Labor Day anyway.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.