Weakness in U.S. Retail Sales

U.S. Retail Sales Shows No Signs of an Uptick in Final Demand

Nominal retail sales fell 0.1% m/m (-8.3% y/y) to US$342.2 billion in July 2009 after rising 0.8% m/m in June. While motor vehicle and parts sales rose 2.4% m/m with a boost from the "cash for clunkers" program, ex-auto sales fell 0.6% m/m (-8.5% y/y). Gasoline station sales fell 2.5% m/m (-32.5% y/y) and core retail sales fell 0.2% m/m (-3.4% y/y). (U.S. Census Bureau)

Like in Europe, clothes and auto were mostly leading the positive numbers thanks to rebates at retailing outlets and help from the government for the auto sector. This is not sustainable beyond the short term if genuine final demand is not back in September and Q4. We can have all the inventory building in the world but it can't last in the absence of a consumer pickup.

US equity markets ended the day up, beyond my understanding.