May Retail Sales Fall
May retail sales fell for the first time since June of 2010. In fact many economists had expectations the drop would have been more than 0.4 percent , attributing the change to factors like weather, rising gas and oil prices and the disruptive behavior of the earthquakes and tsunami in Japan.
What ingredients go into the rise and fall of retail sales? Jobs of course, looking at the statistics from the Department of Labor for May, there was a small increase in jobs, approximately 54, 000 were created. Another Bad Sign for Hiring, article by Catherine Rampell, the National Federation of Independent Business mirrors the Labor report, showing most gains for jobs in major industry and small businesses are in professional services and construction, with manufacturing losing as many as it added.
Another factor in the mix is weather; we experienced some of the worst weather in a long time, prolonged and repeated snow storms on the east coast, rain, floods and the horrific earthquake in Japan followed by tsunami pounding the supply chains, creating disruptions across the world. The Labor Department report shows these disruptions had producer prices rising by 0.2 percent in May, making a change from the 0.8 increase in April. Hard to get auto parts caused a reduction in inventory so auto prices rose and sales declined.
Cars, food, beverages, sporting goods, hobbies, books and music sales all dropped with a 0.4 to 0.5 percent sales loss. The highest percentage drop was in electronic and appliances, plummeting to 1.3 percent, largest decline since March of 2010. Television sales, a bellwether item in retail, had a weak demand at the beginning of this year.
Analysts are divided into two camps, one are saying we are looming in the jaws of a recession the other clamoring that we have nowhere to go as far as a stimulus package, and yet U.S. stock did better and the dollar was better against the yen.Continued on the next page