Retail sales rising more slowly than anticipated
The U.S. Census Bureau has just released its monthly report on retail sales activity. The Census Bureau found that retail sales for July grew about 0.4 percent from June and had grown 5.5 percent since June of 2009. The increase was less than projected. Economic indicators are pointing toward a slower recovery. Consumer prices also rebounded slightly after several months of slight decline. Consumer prices are being watched closely, as increasing prices and decreasing incomes and assets are signs of deflation.
Retail sales get a slight bump
Retail sales for July saw a slight increase. The U.S. Census Bureau reports that retail sales as a whole increased by 0.4 percent for July, but that figure can be somewhat misleading. Discretionary retail spending, for goods such as furniture or electronics, fell 0.42 percent between June and July. Discretionary spending, according to the Christian Science Monitor, rose 2.77 percent from a year ago. Retail sales had fallen the previous two months, as May retail sales were down 0.3 percent from April, and June sales slid a further 1.0 percent, according to the Wall Street Journal.
Modest gains helped by auto sales
With car companies beginning to make serious gains, such as General Motors and Ford returning to profitability, the sale of cars helped retail sales figures. According to Bloomberg, the bulk of the increase was from people buying cars and, subsequently, gas. All other purchases combined for a drop of 0.1 percent. Consumer prices also rose. The Consumer Price Index rose 0.3 percent, meaning that the cost of living is increasing in an era of high unemployment.
Watching for signs of deflation
The unemployment rate is still almost 10 percent, and recovery is progressing slowly. The Federal Reserve is currently looking for signs of deflation, which is where prices of goods increases while less money is available to go around. Less wealth is held in housing, and fewer people are employed fully. Overall conditions, including an increased savings rate, indicate trepidation of consumers to spend on larger items.