Economy Watch: E-Commerce Retail Continues to Expand

By Dees Stribling, Contributing Editor

The Census Bureau reported late last week that U.S. e-commerce retail sales for the first quarter of 2014, adjusted for seasonal variation, but not for price changes, was $71.2 billion, an increase of 2.8 percent compared with the fourth quarter of 2013. Total retail sales for 1Q 2014 were $1,147.4 billion, an increase of a scant 0.2 percent quarter-over-quarter, so e-commerce growth continues to outpace overall retail sales by a considerable margin.

Compared with the first quarter of 2013, e-commerce sales increased 15 percent in the first quarter of 2014, while total retail sales increased only 2.4 percent over the same period. That’s another growth pattern that’s held fairly stable in recent years, despite the turbulence of the recession.

The Census Bureau has been tracking e-commerce sales as a separate category for almost a decade now, and its growth as a percentage of retail sales has been consistent. E-commerce sales in the first quarter of 2014 accounted for 6.2 percent of total sales. In the first quarter of 2005, e-commerce amounted to about 2.4 percent of the total universe of retail sales. Except for the worst quarters of the recession, e-commerce retail sales have always grown quarter-over-quarter and year-over-year.

Commercial property prices mostly recovered

CoStar reported on Monday that its two broadest measures of pricing for commercial properties—the value-weighted U.S. Composite Index and the equal-weighted U.S. Composite Index—each finished the first quarter of 2014 on a positive note. The U.S. equal-weighted index, which represents lower-value properties, has the most momentum, with pricing up 4.2 percent for the first quarter of 2014 and 17.1 percent year-over-year.

The U.S. value-weighted index, which is more heavily weighted toward larger, higher-value properties, has already recovered to within 5 percent of its pre-recession peak levels. As a result, pricing gains in the value-weighted Composite Index have slowed, advancing by only 0.5 percent in Q1 2014 and 10.1 percent for the year ending in March 2014. The company reported that the percentage of commercial property selling at distressed prices has fallen by more than two-thirds from the peak levels reached in 2011, to just 10 percent of all trades in Q1 2014. Also, its Multifamily Index continued to post steady growth, advancing by 7.8 percent for the 12 months ended March 2014. Pricing in the overall Multifamily Index is now within 8 percent of its pre-recession peak.

Cash housing sales still high, but dropping

CoreLogic reported last week that cash sales made up 40.2 percent of total home sales in February 2014, down from 43.7 percent a year ago and 40.8 percent a month earlier. Before the housing crisis, the cash sales share of total home sales averaged around 25 percent. The cash-sale peak for U.S. housing occurred in January 2011, the company says, when cash deals made up 46.2 percent of total home sales.

Wall Street had another up day on Monday, with the Dow Jones Industrial Average up 20.55 points, or 0.12 percent. The S&P 500 advanced 0.38 percent and the Nasdaq gained 0.86 percent.