Retailers Report Best Sales Growth Since March

Retailers report strong gains for AugustBy ANNE D'INNOCENZIO,AP Retail Writer


NEW YORK (AP) - This summer, Americans were walking contradictions: They opened their wallets despite escalating fears about the slow economic recovery and surging gas prices.

A group of 18 retailers ranging from discounter Target (TGT) to club-operator Costco (COST) reported August sales on Thursday that rose 6 percent - the industry's best performance since March - according to trade group International Council of Shopping Centers. At the same time, the government released numbers showing that Americans spent in July at the fastest clip in five months.

The news appears to show that what Americans say and do are two different things: The reports come two days after a private research firm said consumer confidence in August fell to its lowest level since November 2011 as Americans grew more concerned about the job market, business conditions and the overall economy.

"It shows some resilience among shoppers. Let's face it. There are a whole series of economic headwinds that they are fighting against," said Ken Perkins, president of Retail Metrics, a research firm. "The results show that the consumer isn't dead."

A small group of merchants representing roughly 13 percent of the $2.4 trillion U.S. retail industry report monthly revenue at stores open at least a year, a key measure since it excludes results from locations that open and close during the year. Some of the biggest retailers like Wal-Mart and Home Depot do not report monthly sales, but the figures still are closely watched because they offer a snapshot of consumer spending, which accounts for more than 70 percent of economic activity.

August's results are important because they offer insight into the back-to-school season - the second most important selling period behind the winter holidays - which runs from mid-July through mid-September. Retailers and economists often use the results from back-to-school as a litmus test of how shoppers will behave during the biggest shopping period of the year in November and December.

The gains in August is better than the growth 4- to 5-percent gain Wall Street predicted at the beginning of the month. And it was the best performance since March, when stores collectively posted a gain of 6.8 percent. Except for a shopping lull in June, stores have seen a healthy pace of anywhere from 4 percent to nearly 7 percent growth since the beginning of the year.

A number of retailers posted strong gains. Costco Wholesale Corp.'s revenue from stores open at least a year climbed 6 percent, beating the 4.5 percent rise analysts surveyed by Thomson Reuters had anticipated. And Target Corp. reported a 4.2 percent increase in revenue at stores opened at least a year. That was better than the 3.1 percent increase that analysts had expected.

"Sales were stronger in the second half of the month," said Gregg Steinhafel, Target's chairman, president and chief executive officer in a statement.

The strong sales reports are an encouraging sign for retailers at a time when there are signs that consumers are becoming impatient with the slowly improving economy. The New York-based Conference Board's Consumer Confidence Index fell to 60.6, down from a revised 65.4 in July. The index now stands at the lowest point since November 2011 when the reading was at 55.2. It's also still far below the 90-reading that indicates a healthy economy.

Several factors may have dampened consumers' moods in August. Gas prices, which had fell sharply from a peak of $3.94 in April, have begun rising again in the last few weeks. And the jobs and housing markets are showing only modest signs of improvement.

Home prices rose 0.5 percent in June from the same month last year, the first year-over-year increase since the summer of 2010, according to The Standard & Poor's/Case-Shiller home price index that was released Tuesday. And on the job market front, employers added 163,000 jobs in July, the most since February. But that's not enough to keep up with a rising population, and the unemployment rate increased to 8.3 percent from 8.2 percent in June.

And there are no signs the job market will significantly improve anytime soon. The applications of people applying for unemployment benefits are a measure of the pace of layoffs. When they fall consistently below 375,000, it generally suggests that hiring is strong enough to lower the unemployment rate. But the Labor Department said Thursday that the number of Americans seeking unemployment benefits was unchanged last week at a seasonally adjusted 374,000, which further suggests slow improvement. The four-week moving average, a less volatile measure, increased to 370,250.

Most economists say stronger growth is needed to produce enough jobs to lower unemployment - and make Americans feel better. The economy grew at an annual rate of 1.5 percent from April through June, down from 2 percent in the first quarter and 4.1 percent in the fourth quarter of 2011.

Despite their concerns about the snail pace recovery, Americans are spending, which could boost an economy mired in subpar growth. The Commerce Department said Thursday that consumer spending rose 0.4 percent in July from June, following no change in June and a slight decline in May. Income grew 0.3 percent, matching the gains from May and June.


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marine1942

Be honest----are you better off now than 3 years ago ?

September 03 2012 at 10:29 AM Report abuse rate up rate down Reply
marine1942

Be honest----are you better off now than 3 years ago ?

September 03 2012 at 10:29 AM Report abuse rate up rate down Reply
captmerit

all credit

September 01 2012 at 7:50 AM Report abuse +1 rate up rate down Reply
nsheats

Oh sure.. go ahead.. spread the good news so the New Republicans can stop buying. As we all kmow they will do ANYTHING to keep Obama from a second term.

August 30 2012 at 8:33 PM Report abuse -1 rate up rate down Reply
1 reply to nsheats's comment
ibe1grump

If only it were that easy. But no. There are too many "believers" out there. I have some beach-front property for sale.

August 30 2012 at 9:29 PM Report abuse +1 rate up rate down Reply
ectullis

Don't beleive that for one picosecond.

August 30 2012 at 5:36 PM Report abuse +1 rate up rate down Reply
DDerr

Oh lord, get a grip. Keep looking at the dark clouds gathering and keep telling yourself its going to be a beautiful day.
I AM SICK OF ECONOMIC EXPERTS. GET A REAL JOB, JERKS! YOURE CLUELESS.

Watch what happens in the Fall, when all the billions ...errr ... TRILLIONS that our wondrous Obama has printed up comes to an end, and reality, and debt, and the bailouts, and hand outs REALLY start taking their toll. People, do NOT ever think that Obama is a good president. In his own "give-it-away" style, he is just as bad as Dimwit George Bush. He borrowed more money for his presidency in 3.5 years, than George Bush did in 8. He took the debt from under $11 Trillion, to $16 TRILLION! So as he bribes voters with give aways, bailouts, handouts, and amnesty to millions of law breaking illegal citizens, he will pass the cost of these bribes onto the next president. AND, the GAO says if he wins, which he will because of his give aways, his next term will end with the country in $22 Trillion in debt. Because of his irresponsible spending, Obama has given the Federal Reserve $500 Billion a year in interest. Thats a TRILLION every two years stolen right from the American Taxpayers pockets. SHAME ON YOU OBAMA

August 30 2012 at 4:11 PM Report abuse rate up rate down Reply
DDerr

Oh lord, get a grip. Keep looking at the dark clouds gathering and keep telling yourself its going to be a beautiful day.
I AM SICK OF ECONOMIC EXPERTS. GET A REAL JOB, JERKS! YOURE CLUELESS.

Watch what happens in the Fall, when all the billions ...errr ... TRILLIONS that our wondrous Obama has printed up comes to an end, and reality, and debt, and the bailouts, and hand outs REALLY start taking their toll. People, do NOT ever think that Obama is a good president. In his own "give-it-away" style, he is just as bad as Dimwit George Bush. He borrowed more money for his presidency in 3.5 years, than George Bush did in 8. He took the debt from under $11 Trillion, to $16 TRILLION! So as he bribes voters with give aways, bailouts, handouts, and amnesty to millions of law breaking illegal citizens, he will pass the cost of these bribes onto the next president. AND, the GAO says if he wins, which he will because of his give aways, his next term will end with the country in $22 Trillion in debt. Because of his irresponsible spending, Obama has given the Federal Reserve $500 Billion a year in interest. Thats a TRILLION every two years stolen right from the American Taxpayers pockets. SHAME ON YOU OBAMA

August 30 2012 at 4:11 PM Report abuse -1 rate up rate down Reply
planetoys

It looks obvious to me. The middle class is being snuffed out as the wealthy make their grab for all the marbles. Nobody is going to stop them.
In the eighties, we thought "if we have enough money saved, we can retire on the high interest it's earning, supplementing our Social Security". Well the interest is gone so now the money is trickling away too. In not too long, Social Security will be "legislated" away.
And why is the interest rate so low? Banks "borrow" from the Fed at "near zero" interest to loan to us at 4% or more? The banks got bailed out of their "bad decisions" on loaning but the "bad decisions" on buying took the hit. Who was that? Oh yeah; The middle class again.
What happened to all of the "near zero" interest money anyway? Did the banks take their lumps and renegotiate the loans down for folks? Nope; They hung onto the assets, bought the assets of OTHER banks, used the write-offs to avoid taxes and essentially double dipped on the bailout. Now they will be landlords and control THAT essential necessity of our lives too.

So who's to blame? Obama? Congress? GWB and his cronies? WHO CARES?
WE are ALL screwed because NOBODY is worth a vote anymore. Not Mitt; Not Obama; And certainly not any "Tea Party" politicians.

"Austerity" is just another word for "reason to screw the middle class" and "deficit" is just another buzz word that means nothing in the long run but how to manipulate the voters into thinking we have something to fear about economic conditions that are and have ALWAYS BEEN manipulated as a giant pyramid scheme.
"This is the most IT has cost EVER".... No kidding. That has ALWAYS been the case. ALWAYS.... Until now? Now it matters? Ask yourself why.

August 30 2012 at 12:50 PM Report abuse -1 rate up rate down Reply
anthdif

Sales as compared to the prior month or an aveage for the prior quarter when sales were dismally low. Of course, we are going to see spurts of spending. People have the money and are not spending it in a routine and consistent manner. Eventually, these little blips are common business cycel movements. Unfortunately, the long term projections based on a wide range of economic measures paint a radically dismal view.

August 30 2012 at 11:59 AM Report abuse +2 rate up rate down Reply
anthdif

Sales as compared to the prior month or an aveage for the prior quarter when sales were dismally low. Of course, we are going to see spurts of spending. People have the money and are not spending it in a routine and consistent manner. Eventually, these little blips are common business cycel movements. Unfortunately, the long term projections based on a wide range of economic measures paint a radically dismal view.

August 30 2012 at 11:59 AM Report abuse rate up rate down Reply