July Retail Sales Show Unexpected Slump
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Retail sales data in July showed an unexpected drop as the 'cash-for-clunkers' auto program was unable to spur spending in other areas and may have actually re-routed consumer activity.
Retail sales in July fell 0.1%, which was well below the consensus of a 0.8% rise and was the first drop in three months. Retail sales excluding automobiles fell 0.6%, also below the consensus of a 0.01% gain.
The data suggests job losses and worries about jobs safety continues to weigh on the U.S. consumer, despite recent positive news flow on the economy. Data today on the jobs front, showed that initial jobless claims was 558,000, an increase of 4,000 from the previous week's revised figure of 554,000.
The July sales declines were broad-based with electronics/appliances falling 1.4%, funiture falling 0.9%, building materials falling 2.1% and sporting goods and general merchandise falling 0.8%. Auto sales was one of the rare bright-spot, rising 2.4% on the 'cash-for-clunkers' program. Other areas showing gains included clothing, health care and restaurant.
Despite the news, retails stocks are holding steady as represented by the flat action in ETF Retail HOLDRs (NYSE: RTH).
Retail giant Wal-Mart (NYSE: WMT) reported second quarter results this morning which beat on the bottom-line but was light on the top-line. Wal-Mart also narrowed its FY10 EPS guidance from $3.45-$3.60 to $3.50-$3.60, which compares to the Street estimate of $3.56.
Retail sales in July fell 0.1%, which was well below the consensus of a 0.8% rise and was the first drop in three months. Retail sales excluding automobiles fell 0.6%, also below the consensus of a 0.01% gain.
The data suggests job losses and worries about jobs safety continues to weigh on the U.S. consumer, despite recent positive news flow on the economy. Data today on the jobs front, showed that initial jobless claims was 558,000, an increase of 4,000 from the previous week's revised figure of 554,000.
The July sales declines were broad-based with electronics/appliances falling 1.4%, funiture falling 0.9%, building materials falling 2.1% and sporting goods and general merchandise falling 0.8%. Auto sales was one of the rare bright-spot, rising 2.4% on the 'cash-for-clunkers' program. Other areas showing gains included clothing, health care and restaurant.
Despite the news, retails stocks are holding steady as represented by the flat action in ETF Retail HOLDRs (NYSE: RTH).
Retail giant Wal-Mart (NYSE: WMT) reported second quarter results this morning which beat on the bottom-line but was light on the top-line. Wal-Mart also narrowed its FY10 EPS guidance from $3.45-$3.60 to $3.50-$3.60, which compares to the Street estimate of $3.56.
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