US Consumer Sales On The Up In July
August 13, 2007
The US retail sector has shown a welcome growth over the course of July, rising beyond analyst expectations for the period according to figures released today.
The ongoing mortgage and housing market problems were thought to be having a negative impact on consumer spending, with forecasts showing only moderate growth as a result.
However, today’s figures appear to blatantly contradict expert opinion and analyst forecasts, reflecting an upturn in spending nationwide.
The predicted 0.2% increase was beaten by a more considerable 0.3% increase in total US retail sales, whilst smashing the 0.7% drop in sales over the previous month.
The figures released today by the US Commerce Department reflect resilience in US consumer spending, whilst also posing to conflict the overall impression of a struggling US economy.
With total retail sales attributable to almost sixty-six percent of the US economy, it was feared that a slowdown in spending caused by mortgage problems could ultimate hamper the economy as a whole.
Rising mortgage costs derived from increased sub-prime lending were considered to potentially dampen disposable income and consumer spending, threatening to stint economic growth and development, according to industry analysts.
Furthermore, with the recent threat of a global credit crunch, it was thought that consumers would shy away from spending in order to preserve resources for the event of credit scarcity.
However, with today’s figures, it would appear that consumers are remaining on track to support the full burden of the economy.
Core retail sales (i.e. excluding cars, fuel and building materials) were up to 0.6% through July, increasing by 0.2% points from June’s figure.
While today’s figures have been well received, experts have forecast that the full impact of sub-prime lending and the recent credit crunch fears could begin to take their toll over the coming months.