Thursday, August 9, 2007

Retail Sales in July Were Soft

According to Market Watch the retail sales for July were soft. This supports previous posts suggesting that the consumer is reducing consumption for a variety of reasons. I fully expect this trend to continue through the remainder of Q3 and Q4. Between lower consumer spending and weak GPDI I find it difficult to forecast anything but weak economic growth throughout the remainder of the year.

The article goes into much more detail on retailer by retailer basis.

Retailers struggled to sell shirts, shorts and shoes in July as shoppers spent less while they grappled with economic anxieties and volatility that has rocked financial markets.

With nearly all of the nation's major retailers reporting sales results to the International Council of Shopping Centers, the cumulative gain stands at 2.6%, according to Thursday's data.

Analysts had been expecting that sales at stores open longer than a year, the industry's most important performance measure, would be weak, particularly among teen and women's-wear retailers.

But the early results suggest that consumers across the board are far more concerned about credit and financing woes sparked by the slowdown in the U.S. housing market and the collapse of the subprime mortgage business.

"I had thought that we'd have a number that was better than this," said ICSC chief economist Mike Niemira. "Certainly the macroeconomic slowdown that we've seen since last summer has taken its toll on consumer spending -- directly through the housing channel and indirectly through the home-value concerns."

Hit hardest were teen retailers and specialty retailers, while luxury retailers was worrisome.

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