Wednesday, August 15, 2012

More Mixed Signals in Retail

The top-of-the-line good news that came out yesterday was that retail sales were strong in June, stronger than we've seen in quite some time. After dropping for three consecutive months, retail and food-service sales rose by 0.8 percent last month. It exceeded all the economists' forecasts, and was the biggest monthly gain in retail sales since February.

But, as we have so often seen in this economy, there was other news as well that undermined the overall message. Inventories at American businesses climbed by only 0.1 percent in June; apparently business owners aren't confident that the rise in retail sales is going to continue over the long haul.

At the same time, confidence among small-business owners has been slipping. The National Federation of Independent Business reported that its monthly survey of business owners dropped by 0.2 points in July, after falling by 3 points in June. Still, that measure remains at 91.2 - that's slightly above its average reading of 90 during the economic recovery.

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