Economy Watch: Retail Sales Post Meager Rise; Small Biz More Optimistic; Housing Inventories Down
- Aug 14, 2013
The Census Bureau reported on Tuesday that U.S. retail sales for July were up 0.2 percent compared with June, and 5.4 percent compared with July 2012. The bureau adjusts its figures for seasonal variations and holidays, but not for price differences.
Take cars out of the equation and retail sales increased 0.5 percent month over month in July. It wasn’t a very good month for car sales, which lost 1 percent compared with June, though car sales are up by 11.8 percent year over year. Also down for the month were furniture sales (off 1.4 percent) and building material and garden supply sales, which lost 0.4 percent.
Most other kinds of retailers posted monthly gains, including food and beverage (up 0.8 percent), clothiers (up 0.9 percent) and even department stores (up 0.6 percent). Non-store retailers, mostly the Internet these days, saw an increase for the month, but not much of one, eking out a 0.1 percent gain.
Small Businesses a Little More Optimistic
The National Federation of Independent Businesses reported on Tuesday that small business optimism edged up in July, with NFIB’s monthly index increasing just over half a point (0.6) to a reading of 94.1. That’s still low(ish) by historical standards – the index hovered around 100 most of the time in the 20 years before the Great Recession – but an improvement since the worst of the recession in 2009 and 2010.
July was another slow month for small business hiring, according to the NFIB. Nine percent of the owners reported adding workers — an average of 2.9 workers per firm — over the past few months. Offsetting that, 12 percent reduced employment by an average of 2.6 workers, producing a net change of negative 0.11 workers per firm. Fifty percent of the owners hired or tried to hire in the last three months, and 40 percent reported few or no qualified applicants for open positions.
Still, only 16 percent of owners reported weak sales (lack of demand) as their top problem, down from 18 percent last month and 20 percent a year ago. When the economy is at its worst, small business owners tend to complain about a lack of demand. During better times, they usually complain about taxes and regulation, which they are doing again.
Housing Inventories Still Slipping
Realtor.com, which is a part of the National Association of Realtors, released its latest housing inventory data on Tuesday, and according to the organization, there was a nationwide decline in housing inventory of 5.24 percent in July compared with the same month last year. National median list prices increased 5.27 percent year-over-year while median age of inventory is down 16.67 percent.
California markets experienced the largest housing inventory declines in the first part of 2013, but that’s changing. Other markets are seeing their inventories dwindle more quickly now, including Detroit, Boston, Denver, Honolulu and Naples, Fla. The large decreases in the for-sale inventory in these markets suggests the beginning of a housing market recovery process similar to what was observed in Florida in 2011, and in California in 2012 and 2013, according to NAR.
Wall Street had a modest up day on Tuesday, helped along by the modest uptick in retail sales, with the Dow Jones Industrial Average gaining 31.33 points, or 0.2 percent. The S&P 500 advanced 0.28 percent and the Nasdaq was up 0.39 percent.