Retail didn’t make it, after all
Not – former Eco 1 students will know – that it was ever going to. By the numbers:
1) Retail sales just weren’t … ooh, what’s that word? Good.
Last-minute purchases over the pre- Christmas weekend failed to salvage what may be the slowest- growing holiday spending season in five years.
2) Taking retailers – and Wall Street – with them.
U.S. stocks dropped for the first time in four days on concern slower sales at Target Corp. and the biggest drop in home prices in at least six years signal consumer spending may weaken more than expected.
3) And onwards and outward. In fact, we can add appreciating oil prices and declining gasoline stocks (meaning future appreciation in gasoline prices, meaning less post-gas disposable income, and more cost-push inflation in prices) to the big drop in house prices (meaning that people have less household wealth to back their consumption, just as their incomes are in trouble).
Crude oil rose above $96 a barrel in New York on speculation an Energy Department report tomorrow will show that U.S. inventories fell for a sixth week.
Supplies dropped 1.75 million barrels in the week ended Dec. 21, according to the median of nine responses in a Bloomberg News survey of analysts. Prices also rose after Turkish jets bombed suspected Kurdish rebel camps in northern Iraq, the military said on its Web site.
Home prices in 20 U.S. metropolitan areas fell in October by the most in at least six years, a private survey showed today.
Property values fell 6.1 percent from October 2006, more than forecast, after dropping 4.9 percent in September, according to the S&P/Case-Shiller home-price index. The decrease was the biggest since the group started keeping year-over-year records in 2001. The index has fallen every month this year.
So much for that killer 1.1% increase in consumer spending. The blog The Big Picture has an excellent re-cap of it “all”, also – particularly with regard to the numbers being bolstered by (i) purchases of gasoline and dinners at restaurants and (ii) things marked-down heavily.