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Consumers hit retail stores to give economy boost
Question of the Day
One positive sign for the U.S. economy: Inflation pressures are starting to ease, largely because energy costs have declined.
U.S. companies paid less for wholesale goods last month for the first time since June. And excluding volatile food and energy costs, so-called “core” wholesale prices were unchanged.
Lower prices mean consumers will have more buying power, potentially boosting consumer spending. A jump in gas and food prices earlier this year had slowed consumption over other goods.
October retail sales were 7.2 percent higher than the same month last year. Internet and catalog sales have risen more than 11 percent since then. Consumers also spent more on sporting goods and at hobby and book stores.
Auto sales have also rebounded since the Japan earthquake and tsunami. The 0.4 percent rise in October from September followed a 4.2 percent surge in the previous month. Sales have increased 7 percent from the same month last year.
In the Miami area, auto sales were decent in October and picked up in the first half of November, said Ed Williamson, part owner of two Buick-Cadillac-GMC dealerships.
People are particular about prices and want incentives, such as low-cost leases, Williamson said. Still, he’s optimistic that the slow auto sales recovery in South Florida will continue into next year.
“I think things started to get better down here in the summer,” Williamson said. “But at the moment we’re seeing the most showroom traffic that we’ve seen all year in the first two weeks of November.”
People are also buying more electronics and appliances. Sales at those stores surged 3.7 percent in October, the biggest monthly gain for that group in nearly two years.
Chris G. Christopher, senior economist at IHS Global Insight, said the launch of the Apple iPhone 4S helped drive those sales.
“People are splurging a little bit here and there,” Christopher said, who cautioned that weak income growth will remain a drag on spending next year.
Megan Dunn, a grad student from Philadelphia, said she’s limited herself to buying clothes on clearance. But she still goes out for dinner sometimes because she enjoys the time with friends and doesn’t mind spending on small treats.
“Eating out is always going to be expensive,” Dunn said. “But it’s a social experience.”
David Hauck said sales at the children’s store he owns with his wife in Boston have been up almost every month this year. In October, they rose 8 percent.
He suspects many people want to keep spending on their children, no matter how bad the economy gets.
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