Tags: Consumers | Strength | Bargain | Hunting

Carr: Consumers Show Signs of Strength, Bargain Hunting Amid High Gas Prices

By    |   Tuesday, 15 Nov 2011 11:50 AM

Retail sales showed strength in the latest report from the U.S. Census Bureau.

Sales were up by 0.5 percent in October when compared with September. Consumers spent 7.2 percent more at retailers when compared to the amount of purchases they made in October 2010. Both numbers show spending is outpacing inflation.

Unfortunately, from a long-term perspective, spending is also stronger than income growth, a trend that seems unsustainable.
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The Bureau of Economic Analysis has reported that personal income is growing at about 4.4 percent a year. Spending gains above the level of income growth are likely being funded by either credit expansion or asset sales.

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(Getty Images photo)
Most retail segments show sales gains that are higher than inflation. An exception is at gas stations.

Gas prices are up 17.9 percent over a year ago and this looks like it starting to weigh on consumer budgets. Sales at gas stations were up only 15.6 percent, indicating that consumers are spending less on gas so that they can spend more elsewhere.

Non-store retailers show the strongest growth outside of gas stations.

They grew sales more than 11 percent, showing a shift away from traditional retailers. Furniture, appliances, and electronics store sales are lagging inflation.

Free-shipping deals may be driving consumers online and combined with lower gas sales, we may be seeing signs that consumers are responding to higher prices with bargain hunting.

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Retail sales showed strength in the latest report from the U.S. Census Bureau. Sales were up by 0.5 percent in October when compared with September. Consumers spent 7.2 percent more at retailers when compared to the amount of purchases they made in October 2010. Both...
Consumers,Strength,Bargain,Hunting
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2011-50-15
Tuesday, 15 Nov 2011 11:50 AM
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