Consumers Embrace Essentials
November 27, 2006,
Dragged down largely by falling gas prices, otherwise a plus for the U.S. economy, and with consumers focusing on the basics and turning their backs on luxuries, October retail sales slipped by 0.2% from month-before levels to $363.7 billion.
But even as prices at the pump came down, consumers stuck largely to staples. The two biggest gainers during the month were health and personal care stores, where sales jumped up by 1.3%, and grocery stores, improving by 1.0%. Cars came out ahead, sales up by 0.6%, and clothing stores improved their business by a slight 0.1%. Otherwise consumers presumably tried to assuage their worries about a weak job market and an even softer housing market, pushing sales in restaurants and bars up 0.3%, the only non-staple channel to record an increase in sales during the month.
Other than gas stations, the biggest decliners were the department-store channel, and furniture and home furnishings stores, both down by 0.7%. Nicked by the weak housing market, sales of building materials and garden supplies dipped by 0.3%. Sales at sporting goods, books and music retailers fell by 0.2%, possibly hurt in part by price-slashing at Tower Records as it prepares to shut its doors. Non-store retailers recorded a 0.1% dip, and sales in electronics stores were flat. HTT
RETAIL SALES IN OCTOBER
|Source: U.S. Department of Commerce
|Health & personal care||1.3%|
|Restaurants & bars||0.3|
|Clothing & accessories||0.1|
|Furniture & home furn. stores||-0.7|
|Bldg. mat./garden supplies||-0.3|
|Sport. goods, books, music||-0.2|
|Electronics & appliances||0.0|