The U.S. Census Bureau announced today that retail and food services sales for September 2008 with seasonal adjustments was down 1.16% from August and down 1.03% compared to a year ago. This was almost double the decline that economists were expecting of -0.7%. Retail sales without including autos (excluding autos makes the data less volatile) was down 0.60% compared to the previous month and up 3.61% compared to the previous year.
Retail sales adjusted for inflation declined by 6.23% in September compared to the previous year. This is the worst annual decline since January 1991. Retail sales was holding up fairly well in spite of the financial crisis. Retail sales adjusted for inflation didn't turn negative until August 2008. Even then it was negative by a tame 0.18%. However, we are now clearly in a recessionary state. This data also came before the massive declines in the stock market this month. The negative wealth effect will put extra pressure on future retail sales numbers.
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