Courtesy of Mish.
Retail sales reports on Wednesday have me thinking about the strength of the economy, commercial construction, jobs, and profit margins.
Let’s start with a look at retail sales.
The Wall Street Journal reports U.S. Retail Sales Falter Amid Signs of Global Slowdown.
Similarly, Bloomberg reports Weaker Retail Sales Signal Smaller Spending Boost.
Retail sales dropped more than forecast in September on a broad pullback in spending that indicates American consumers provided less of a boost for the economy in the third quarter.
The 0.3 percent decrease followed a 0.6 percent August gain that was the biggest in four months, Commerce Department figures showed today in Washington. Sales fell at auto dealers, furniture stores, building-supply outlets and clothing merchants. The median forecast in a Bloomberg survey of economists called for a 0.1 percent drop.
“The fact that real wages and salaries haven’t picked up that dramatically, it puts a ceiling on how much spending can accelerate,” said Omair Sharif, a U.S. economist at RBS Securities Inc. in Stamford, Connecticut. “It seems like relatively widespread softness in spending. The pickup in consumption that we’re all waiting for hasn’t quite taken off yet.”
Slower Store Openings
Reuters reports Wal-Mart to Slow Store Openings, Invest More in Ecommerce
Wal-Mart Stores, the world’s largest retailer, said on Wednesday it would open fewer stores in the U.S. in the next fiscal year and ramp up spending on e-commerce.
The retailer will open 180-200 of its small format stores, called Neighborhood Markets, in the next fiscal year through January 2016, Greg Foran, head of the U.S. business, told a meeting of investors and analysts. That compares with its plan to open 270-300 of the small format stores in the current fiscal year.
Foran said Wal-Mart would open 60-70 Supercenters, its large format store, in the next fiscal year, compared with a plan for 115 openings, including conversions, this year.
Fewer Stores, Less Hiring
Fewer stores means less construction and less hiring. The former is transitory, the latter more lasting. If this is the trend at Wal-Mart, can Target and other retailers be that far behind?
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