Economy Watch: Retail Sales See Unexpected Spike
Consumers unexpectedly went shopping with more brio than expected in July, according to the U.S. Census Bureau on Tuesday.
By Dees Stribling, Contributing Editor
Consumers unexpectedly went shopping with more brio than expected in July, according to the U.S. Census Bureau on Tuesday. On a monthly basis, retail sales were up 0.8 percent compared with June. Thus July compares very favorably to June, when retail sales dropped 0.7 percent month-over-month.
Take out notoriously volatile gasoline sales, which tend to yo-yo in price (the bureau adjusts for seasonal factors, but not price), and retail sales were still up 0.8 percent. Year-over-year, total retail sales were 4.1 percent higher in July 2012. Take gas out of the annual calculation, and the sales increase was even better at 5 percent.
For the most part, the July retail sales uptick reversed the downtick in June. But it’s also true that July’s retail sales (not adjusted for inflation) are actually 7 percent above the pre-Great Recession peak, which happened in December 2007.
SoCal home sales, prices edge up
Southern California, one of the worst-hit U.S. residential real estate markets, is showing some signs of recovery, according to real estate data specialist DataQuick on Tuesday. SoCal home sales rose on a year-over-year basis for the seventh consecutive month in July, and increased activity in move-up and high-end submarkets contributed to a significant rise in the region’s median sale price, which neared a four-year high.
The median price paid for a home in the six-county region was $306,000 last month, up 2 percent from June and up 8.1 percent from July 2011. Greater demand and a thinner inventory of properties for sale help explain recent gains in the median price, the company noted. But the increases also stem from a sharp drop in foreclosure resales, which are concentrated in lower-cost areas, as well as a substantial increase in the portion of sales in mid- to high-end neighborhoods.
“Even adjusting for changes in market mix, there’s growing evidence prices have crept up in areas where more demand has met a shrinking number of homes for sale,” DataQuick president John Walsh said in a press statement. “But we’re approaching the peak of the traditional spring-summer home-buying season. Whether these trends hold into the fall and winter isn’t clear.”
EU economy slip-slides away
As expected, the 27-country EU economy is still contracting, according to EU statistics agency Eurostat on Tuesday. The zone shrank an annualized 0.2 percent in the second quarter of this year, dragged down by Greece, Italy and Spain especially. Germany, long the strongest economy in the region, is still growing—but barely, an annualized 0.3 percent during 2Q12.
U.S. wholesale prices gained more than expected in July. According to the Bureau of Labor Statistics on Tuesday, the Producer Price Index rose 0.3 percent for the month, with food prices gaining 0.5 percent, more than enough to make up for a decline of 0.4 percent in energy prices.
Wall Street was up most of the day on Tuesday, but ended practically flat. The Dow Jones Industrial Average gained 2.71 points, or a scant 0.02 percent, while the S&P 500 was down a mere 0.01 percent and the Nasdaq lost 0.18 percent.