U.S. retail sales jump as Obama talks economy in China
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A big jump in car purchases forced the monthly retail sales figures to a higher-than-expected increase, but the Commerce Department numbers released this morning showed that the rest of spending was essentially flat.
With President Obama discussing the economy, among other issues, in China, today’s numbers raise questions about how deep or sustained the recovery might be. China holds a significant amount of U.S. debt as well as being a major supplier of retail goods.
According to today’s numbers, retail sales rose 1.4% last month, but excluding auto sales, the demand rose a scant 0.2%. The Obama administration also worsened the September numbers to show 2.3% drop instead of the 1.5% initially reported.
Consumers in August took advantage of the ‘cash for clunkers’ program and pushed car sales way up, but they fell 14.3% by September. For October, auto sales jumped 7.4%.
The bottom line is that people are spending less, understandable given a 10.2% jobless rate and fears of further economic woes. But the numbers portend some troubles for the Christmas season and for the pace of economic recovery in general.
-- Michael Muskal
