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Rise in US Retail Sales, Excluding Automobiles
Jun 23, 2008

An increase of about 0.5% was marked in the US retail sales excluding automobiles in April 2008, shows the data released by Commerce Department.

The data from the Commerce Department shows an increase in sales of retail products (excluding cars) in the US market during April 2008 and this increase reveals that despite the rising prices of energy and food, people are spending more and helping the economy to grow, reports

However, retail sales dropped by about 0.2% but after excluding sales of cars, it increased by nearly 0.5%. According to the economists, the total US retail sales are likely to decline by about 0.1%, but after excluding sales of automobiles, it is expected to increase by nearly 0.2%. But more than the expected growth is recorded in retail sales due to the various marketing strategies of retailers and more spending capacity of consumers on retail products as they are saving money by cutting on driving due to costly gasoline, says the data.

Moreover, fear of some job losses in April 2008 is proved wrong by a rapid Q1 productivity, which increased corporate profits. Also, a notion that high energy prices are discouraging people from spending more is outdone due to the increase in retail sales as American consumers are purchasing goods from discount-oriented retailers like Wal-Mart, in place of costlier departmental stores.

Thus, in near future, rise in consumer spending is expected due to rebate checks given by government to nearly 130 Million taxpayers and this is going to improve the US economic slowdown and help in compensating the ill effects of decline in housing prices.

On May 13, 2008, a survey of economists released by Philadelphia Federal Reserve Bank revealed that the US economy is expected to grow at nearly 0.2% annually in Q2 of 2008 as compared to slow growth of about 0.6% in Q4 of 2007 and Q1 of 2008.

A Senior Research Analyst at
RNCOS said, “However, prior to April 2008, sales of retail products recorded decline due to miserable business conditions and several uninterested consumers but one month increase in consumer spending cannot be considered as improvement in financial conditions of the consumers. Thus, tax rebate is the only measure that can reduce pressure on consumers and increase their spending on retail products.”

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