Join        Login             Stock Quote

Retail Sales Contract but Ex-Autos Rise!

 May 13, 2008 09:53 AM

Even though retail sales decreased 0.2 percent last month, the US dollar skyrocketed on the report because excluding autos, sales actually increased 0.5 percent. Interestingly enough, despite the rise in gasoline prices, gas station receipts actually fell. This suggests that Americans are driving less and buying fewer cars. This weekend, the NY Times reported that gas prices are sending a surge of riders to mass transit and the details of the retail sales report confirms that. I expect the Metro North trains to get even more packed. Consumers did increase their spending on building materials, electronics and clothing.

As indicated in my retail sales preview yesterday, earnings have increased for many discount retailers and there were many reasons to believe that retail sales was not exceptionally weak in April:

[Related -Macy's, Inc. (M): The One Department Store Stock You Can Trust]

1. The International Council of Shopping Centers (ICSC) reported a 3.6 percent increase in chain store sales
2. Strong earnings have been reported by discounters such as Wal-Mart, Costco and Kohl's.
2. SpendingPulse, the retail data service of MasterCard Advisors reported 0.1 percent rise in spending

According to Ken Perkins of Retail Metrics Inc, April was the best month for retailers since November. Weak job growth does not always translate into weak consumer spending. In October 2001, when non-farm payrolls dropped 325k, retail sales actually jumped 6.6 percent. Retail sales can be very volatile on a month to month basis.

[Related -Target Corporation (TGT) Dividend Stock Analysis]

Even though the numbers give traders some reason to be dollar bullish, consumer spending still remains vulnerable. Therefore don't expect too much from the dollar rally.



Comments Closed

rss feed

Latest Stories

article imageTackling China's Debt Problem: Can Debt-Equity Conversions Help?

China’s high and rising corporate debt problem and how best to address it has received much attention read on...

article imageWill Job Growth Kill The Bear-Market Signal For Stocks?

It’s all about jobs now. Actually, it’s always been about jobs. But the stakes are even higher—perhaps more read on...

article imageAutomating Ourselves To Unemployment

In this current era of central planning, malincentives abound. We raced to frack as fast we could for the read on...

article imageFed: Waiting For June… Or Godot?

The Federal Reserve left interest rates unchanged yesterday, as widely expected. But the possibility of a read on...

Popular Articles

Daily Sector Scan
Partner Center

Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.