Retail sales drop 0.5% in June

Well, according to Bill Press, this is all your fault.  Retail sales fell again by 0.5% in June after a bigger drop in May in the latest from Recovery Summer:

Retail sales fell in June for the second straight month, more evidence that the recovery will slow in the second half of the year.

Retail spending dropped 0.5 percent in June, the Commerce Department reported Wednesday. That followed a 1.1 percent fall in May. Excluding autos, spending was down 0.1 percent in June. …

The June decline in retail sales was larger than the 0.2 percent fall that economists had expected.

This is not the only economic indicator pointing downward this week.  Yesterday, the Labor Department announced that total job openings had declined in May, and that layoffs had increased:

Job openings dropped in May from the previous month and layoffs edged up, fresh evidence that employers are reluctant to add workers.

The decline in job openings comes after a sharp rise the previous two months, driven by temporary government hiring for the 2010 census and more openings in the private sector. As a result, the number of available jobs has rebounded since the depths of the recession but remains well below pre-recession levels.

The Labor Department said Tuesday that job openings fell to 3.2 million in May from 3.3 million in the previous month. April’s upwardly revised figure was the highest in 18 months.

The department’s report, known as the Job Openings and Labor Turnover survey, illustrates how competitive the job market is. There were about 4.7 unemployed people, on average, for each job opening in May. That’s down from the peak of 6.3 last November, but is much higher than the 1.8 unemployed per opening when the recession began in December 2007.

Gallup also released the results of its regular survey on spending, which relates to all of the above.  It found that Americans have returned to the spending levels of 2009, when uncertainty over the American economy had people hanging onto their money instead of spending it:

Americans reported spending an average of $65 per day during the week ending July 11 in stores, restaurants, gas stations, and online. Consumer spending has essentially matched 2009 weekly spending levels in four of the past five weeks. The July 4 week is the exception, with consumers spending a little more in their celebrations this year than last.

Gallup’s self-reported consumer spending measure fell in June compared with May. This is consistent with the consensus expectation of a declining retail sales report when the Commerce Department provides June results on Wednesday. Retail sales is a broader measure — it includes the total receipts at stores selling durable and nondurable goods — than Gallup’s spending measure, which is oriented more toward discretionary spending, but the two often trend together when autos are excluded.

Spending rose for some areas of retail, the Commerce Department reported, such as the clothing sector.  However, one area shows the interrelation between these indicators and the latest housing-bubble collapse:

Sales at speciality clothing stores were up 0.6 percent in June. Sales at appliance stores posted a 1.3 percent advance. But there was weakness at hardware stores, where sales dropped 1 percent, and at furniture stores, which saw a decline of 1.1 percent.

That would indicate that people are not working on home improvements, activities associated with either preparation for the sale of homes or work on newly-purchased houses.  The collapse in housing sales in May no doubt had some impact on these figures.

The overall message of these indicators is a crisis in confidence in the economy — and the political leadership of the United States.  Even if CBS and the Washington Post hadn’t polled on confidence in Obama, these results would have painted a very clear picture.

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