Filed under: Wal-Mart (WMT) , Economic data Gosh, from the recent retail report, you'd think the economy is back on track. But, of course, you'd be wrong. Retail sales in the U.S. rose twice as much as forecast in May. Twice as much. Sales climbed 1% , and as Bloomberg says, it was the most since November, and it followed a 0.4% gain in April. Excluding gasoline, purchases increased 0.8% last month. For the quarter, though, spending may grow at an annual rate of 0.8%, the weakest since the first quarter of 1995. So what happened in May? Americans used their tax rebates checks of course. All those who criticized the government's stimulus plan, saying the money would not be spent on discretionary purchases were wrong. Consumers spent the money at electronics and department stores, at least the portion that was left after filling up the gas tank at $4 a gallon. Don't forget the Federal Reserve's successive rate cuts. Those could have had something with the increase in retail sales too. Now some economists even venture to say that the American consumer may be a lot more resilient than anticipated, and that perhaps the U.S. could avoid a major downturn recession after all. Well, some people, I guess, can't help but being excessively optimistic. Saying that would be to ignore the housing slump, credit crunch, high (and increasing) oil and food prices and the softening labor market . But it's true: the report was positive, showing sales ...
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Filed under: Wal-Mart (WMT) , Economic data Gosh, from the recent retail report, you'd think the economy is back on track. But, of course, you'd be wrong. Retail sales in the U.S. rose twice as much as forecast in May. Twice as much. Sales climbed 1% , and as Bloomberg says, it was the most since November, and it followed a 0.4% gain in April. Excluding gasoline, purchases increased 0.8% last month. For the quarter, though, spending may grow at an annual rate of 0.8%, the weakest since the first quarter of 1995. So what happened in May? Americans used their tax rebates checks of course. All those who criticized the government's stimulus plan, saying the money would not be spent on discretionary purchases were wrong. Consumers spent the money at electronics and department stores, at least the portion that was left after filling up the gas tank at $4 a gallon. Don't forget the Federal Reserve's successive rate cuts. Those could have had something with the increase in retail sales too. Now some economists even venture to say that the American consumer may be a lot more resilient than anticipated, and that perhaps the U.S. could avoid a major downturn recession after all. Well, some people, I guess, can't help but being excessively optimistic. Saying that would be to ignore the housing slump, credit crunch, high (and increasing) oil and food prices and the softening labor market . But it's true: the report was positive, showing sales ...