Economic Rebalancing

The global economy is horribly out of balance, with the United States going deeper into debt each year as a result of a huge trade gap. This blog describes the process of global economic rebalancing. If you have any comments or questions about the posts here, please don't hesitate to use the comments section.

Tuesday, June 05, 2007

Retail Sales at a Snail's Pace

As a greater percentage of US consumers struggle with large debt burdens and tighter credit standards, this is predictably hitting the retail sector. Companies like Bed, Bath and Beyond have begun issuing earnings warnings, and it's not just home related retailers. According to the chain store sales data even Apparel stores were hit hard in April (only drug stores did well).

April was off partly because of the earlier Easter, but a larger downtrend is evident among multiple data series. Chain Store Sales:


ShopperTrak:


Jobs:


Russ Winter has been doing a great job tracking data on shipping volumes and sales tax receipts. It all points to a slowdown in sales, with debt service burdens being a likely culprit. Now that retail jobs appear to be in decline, the problem could compound as unemployed consumers will have even less to spend.

On the bright side retailers who cater to high end consumers still seem to be doing well. These firms showed good year over year comparisons for April:
+7.3% JoS A Bank
+1.0% Neiman Marcus
+3.1% Nordstrom
+11.7% Saks Inc.

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