- Ohio university quiz implies atheists are naturally smarter than Christians
- Rep. Henry Cuellar on border crisis: ‘Playing defense on the one-yard line’
- Activists vow to occupy fast-food restaurants to get higher pay
- Rep. Luis Gutierrez: Senate Dems wary of immigration politics
- Summer camp for 1 percenters: Sushi, limos and shopping at FAO Schwarz
- Colorado gun crackdown law found to be built on faulty data
- Hank Aaron steps to fundraising plate for Democrat Michelle Nunn
- ISIL terrorists blow up burial site of Jonah, vow more of same
- Impeach Obama, say 35 percent in new poll
- Taliban yank 14 Shiites off bus, bind and shoot them on Afghan road
Retailers report best sales growth since March
Question of the Day
NEW YORK (AP) — Americans kept spending this summer despite their escalating fears about the slow economic recovery and surging gas prices.
A group of 18 retailers ranging from discounter Target to club-operator Costco reported monthly sales on Thursday that rose 6 percent — the industry’s best performance since March — according to the International Council of Shopping Centers trade group. The results come as the government released numbers showing that Americans spent in July at the fastest clip in five months.
The reports seem to show that what Americans say and do are two different things: The strong spending results come just two days after a private research firm said consumer confidence in August fell to its lowest level since November 2011.
“It shows some resilience among shoppers. Let’s face it: There are a whole series of economic headwinds that they are fighting against,” said Ken Perkins, president of Retail Metrics, a research firm. “The results show that the consumer isn’t dead.”
A small group of merchants representing roughly 13 percent of the $2.4 trillion U.S. retail industry report monthly revenue at stores open at least a year, a key measure since it excludes results from locations that open and close during the year. Some of the biggest retailers, such as Wal-Mart and Home Depot, do not report monthly sales, but the figures still are closely watched because they offer a snapshot of consumer spending, which accounts for more than 70 percent of economic activity.
August’s results are important because they offer insight into the back-to-school season — the second-most-important selling period behind the winter holidays — which runs from mid-July through mid-September. Retailers and economists often use the results from back-to-school as a litmus test of how shoppers will behave during the biggest shopping period of the year in November and December.
The gains in August is better than the 4 percent to 5 percent gain Wall Street predicted at the beginning of the month. And it was the best performance since March, when stores collectively posted a gain of 6.8 percent. Except for a shopping lull in June, stores have seen a healthy pace of anywhere from 4 percent to nearly 7 percent growth since the beginning of the year.
A number of different retailers had gains. Costco Wholesale Corp.’s revenue from stores open at least a year climbed 6 percent, beating the 4.5 percent rise analysts surveyed by Thomson Reuters had anticipated. And Target Corp. reported a 4.2 percent increase in revenue at stores opened at least a year. That figure was better than the 3.1 percent increase that analysts had expected.
“Sales were stronger in the second half of the month,” said Gregg Steinhafel, Target’s chairman, president and chief executive officer in a statement.
The strong sales reports are an encouraging sign for retailers at a time when there are signs that consumers are becoming impatient with the slowly improving economy. The New York-based Conference Board’s Consumer Confidence Index fell to 60.6, down from a revised 65.4 in July. The index now stands at the lowest point since November 2011 when the reading was at 55.2. It’s also still far below the 90-reading that indicates a healthy economy.
Several factors may have dampened consumers‘ moods in August. Gas prices, which had fallen sharply from a peak of $3.94 in April, have begun rising again in the past few weeks. And the jobs and housing markets are showing only modest signs of improvement.
Home prices rose 0.5 percent in June from the same month last year, the first year-over-year increase since the summer of 2010, according to the Standard & Poor’s/Case-Shiller home price index that was released Tuesday. And on the job market front, employers added 163,000 jobs in July, the most since February. But that’s not enough to keep up with a rising population, and the unemployment rate increased to 8.3 percent from 8.2 percent in June.
And there are no signs the job market will improve significantly any time soon. The applications of people applying for unemployment benefits are a measure of the pace of layoffs. When they fall consistently below 375,000, it generally suggests that hiring is strong enough to lower the unemployment rate. But the Labor Department said Thursday that the number of Americans seeking unemployment benefits was unchanged last week at a seasonally adjusted 374,000, which further suggests slow improvement. The four-week moving average, a less volatile measure, increased to 370,250.
Most economists say stronger growth is needed to produce enough jobs to lower unemployment — and make Americans feel better. The economy grew at an annual rate of 1.5 percent from April through June, down from 2 percent in the first quarter and 4.1 percent in the fourth quarter of 2011.
Despite their concerns about the snail-pace recovery, Americans are spending, which could boost an economy mired in subpar growth. The Commerce Department said Thursday that consumer spending rose 0.4 percent in July from June, following no change in June and a slight decline in May. Income grew 0.3 percent, matching the gains from May and June.
Daniel Wagner in Washington contributed to this report.
TWT Video Picks
Second- and third-stringers eye 2016 if front-runner stumbles
- Michelle Obama says money in politics is bad, asks donors for 'big, fat check'
- Presidents of Honduras, Guatemala blame U.S. for border children crisis
- 'We're coming for you, Barack Obama': Top U.S. official discloses threat from ISIL terrorists
- NAPOLITANO: What if our democracy is a fraud?
- EDITORIAL: Detroit's water 'spigot bigots'
- Hamas rejects Kerry's call for cease-fire; Fears grow others could join fight against Israel
- Obama orders Pentagon advisers to Ukraine
- PRUDEN: The Democratic-wannabe mice under Hillary Clinton's feet
- Obama takes aim at 'corporate deserters'
- Crime-ridden U.S. cities differ on ways to fight gun violence
Obama's biggest White House 'fails'
Celebrities turned politicians
Athletes turned actors
20 gadgets that changed the world
Fighting in Iraq