Economy Watch: E-Commerce Continues to Expand
- Aug 18, 2014
The Census Bureau reported on Friday that U.S. e-commerce sales for the second quarter of 2014 were $75 billion, an increase of 4.9 percent compared with the first quarter of the year. Compared with the second quarter of 2013, e-commerce sales were up 15.7 percent.
The figures, adjusted for seasonal variation but not price changes, are continuing to follow the pattern of e-commerce sales for the last decade: generally up, even during the recession. Standard retail sales have been going up as well, though not as rapidly or evenly. Total U.S. retail sales for the second quarter of this year were $1.174 trillion, up 2.3 percent for the quarter, and 4.4 percent year-over-year, according to the Census Bureau.
The slice of retail sales that e-commerce represents is also growing. In Q2 2014, e-commerce represented 6.4 percent of total U.S. retail sales, up from 5.9 percent in the first quarter. As recently as the first quarter of 2005, e-commerce sales represented only about 2.5 percent of total retail sales.
Consumer sentiment unexpectedly drops
Overall, American consumers seemed a little grumpier in mid-August than at any time since last fall, according to the University of Michigan on Friday. Its index of consumer sentiment dropped 2.6 points from the beginning of the month to a lower-than-expected 79.2 at mid-month. The index had finished July at 81.8, compared with a mid-July reading of 81.3 and a end-of-June reading of 82.5.
The components of the index were actually mixed. There was a 2.2-point gain in consumers’ feeling about current conditions, taking the index to a post-recession high of 99.6. On the other hand, the expectations component dropped by a fairly steep 5.6 points, bring it to 66.2, the index’s lowest level since the government shut down last October. There didn’t seem to be a specific reason for the drop in mid-August.
The University of Michigan queries 500 households each month on their financial conditions and their take on the economy. Though the most recent reading is lower any other this year, it’s still within the 75 to 85 range the sentiment index has experienced since early 2012, after its recovery from the scare over a U.S. default in the summer of 2011.
American industrial production edges up
U.S. industrial production increased 0.4 percent in July for its sixth consecutive monthly gain, according to the Federal Reserve on Friday. Manufacturing output advanced 1 percent in July compared with June, its largest increase since February. Cars led the way: the production of motor vehicles and parts jumped 10.1 percent, while output in the rest of the manufacturing sector rose 0.4 percent.
At 104.4 percent of its 2007 average, total industrial production in July 2014 was 5 percent above the same month a year earlier. Capacity utilization for total industry edged up 0.1 percentage points to 79.2 percent in July, which is 1.7 percentage points above a year earlier but 0.9 percentage points below its long-run (1972–2013) average.
Wall Street had a mixed day on Friday. The Dow Jones Industrial Average was down 50.67 points, or 0.3 percent, while the S&P 500 lost a mere 0.01 percent. The Nasdaq advanced 0.27 percent.