Retail Sales Rise Beyond Expectations

(AP)  Retail sales jumped in August, spurred by widespread gains beyond the expected increases of auto sales due to the government's popular Cash for Clunkers program.

And while inflation at the wholesale level also rose last month as gasoline prices surged the most in a decade, the retail sales report is a sign that consumers may be less cautious about spending as the economy recovers. Consumer spending is closely watched because it accounts for about 70 percent of the nation's economic activity.

The Commerce Department said Tuesday that retail sales rose a seasonally adjusted 2.7 percent last month, after falling 0.2 percent in July. That beat analysts' expectations of a 2 percent increase, according to a survey by Thomson Reuters.

Excluding autos, sales rose 1.1 percent, ahead of an expected 0.4 percent jump. Excluding autos and gas, sales rose 0.6 percent.

In a separate report, the Labor Department said wholesale prices rose 1.7 percent in August, more than double the 0.8 percent rise economists expected. Wholesale prices had fallen by 0.9 percent in July. Both months were heavily affected by energy prices.

Excluding volatile energy and food costs, core inflation as measured by Producer Price Index posted a more modest 0.2 percent increase, close to the 0.1 percent advance economists expected. The index tracks the prices of goods before they reach store shelves.

While many analysts believe the economy is staging a recovery in the current July-September quarter, the rebound is not expected to trigger inflation pressures because the labor market remains weak.

The Commerce Department report showed that auto sales soared 10.6 percent last month, the most in almost eight years due mainly to the clunkers program. Gas station sales rose 5.1 percent, as prices at the pump rose. Economists expected increases in both categories, but sales also rose at electronics and appliance stores, department and sporting goods stores.

The clunkers program, which ended last month, provided consumers with rebates of up to $4,500 if they traded in older gas-guzzlers for new, more fuel-efficient models. The incentive boosted car sale 30 percent in August, after a 2.4 percent rise in July.

Many economists expect consumer spending to increase in the current July-September period, after it fell in the second quarter, mostly because of the clunkers program. That could cause the economy to grow by as much as 3 to 4 percent in the third quarter, many economists expect, helping to end the worst recession since the 1930s.

But analysts worry that without consistent consumer spending growth, the recovery could weaken next year, as government stimulus efforts end.

Other recent economic reports have been positive. Last week, the Federal Reserve said in a regional survey that the economy is stabilizing or improving in the vast majority of the country.

Meanwhile, President Obama on Monday credited his administration and the $787 billion stimulus package rammed through Congress in the first days of his taking office for helping to prevent an even worse economic downturn.

"And though I will never be satisfied while people are out of work and our financial system is weakened, we can be confident that the storms of the past two years are beginning to break," Mr. Obama said in a speech on financial reform in New York.

The nation's gross domestic product, the broadest measure of the economy's output, fell 5.5 percent in last year's fourth quarter and the first three months of this year, the worst six-month showing in nearly 50 years.

But in the April-June quarter the decline slowed to 1 percent and many analysts expect the economy will grow in the second half of this year.

[bubbadubba]

I expect Rush, Hannity, and Beck to spew that only stores in black neighborhoods had increases in sales from welfare money increases by Obama.
No joke, if you just tune in to any of those fools for just a few minutes you would think you are listening to a KKK meeting.

[ontheleft]

The idea that the economy is still contracting is not a "fringe" idea held only by "right wing lunatics". This economy is in much worse shape than most people realize. We are in a depression (10% GDP contraction) and things are going to get much worse as time goes by.

[pigsinlipstick]

HERE IS A REAL DIFFICULT ASSIGNMENT FOR YOU ALL,

SOMEONE FIND A REPUBLI'CON' THAT WILL SAY ANYTHING GOOD

ABOUT THEIR NEW PRESIDENT, ANYTHING AT ALL,

YOU CAN'T DO IT, THEY ALL HOPE FOR AMERICA TO LOSE,

THEY WANT AMERICA TO FAIL , ALL THEY CARE ABOUT IS POWER AND MONEY

[doc_holliday76]

GEEZ....more bad news for the bushevik neoconservitards.....

It appears that the DOW is flirting with 9,700 today -- a full 1,700 points, or a 21% GAIN above the 8,000 on Jan. 20th, 2009 -- which means we might see the entire LOSS of 26% during the miserable 8 years of bushworld erased in President Obama's first year!

Yep, as President Obama continues to pull America out of the bush/cheney Great Recession, the bushevik neoconservitard FEARmongers can only spew their usual beck/hannity/rush moronic propaganda!

[reveal5]

Good economic news...Time for the fringe CBS posters to be angry and depressed. The fringe folks will be doing their best, as usual, to degrade any economic positivety. The fringe birthers, deathers, anarchists, sociopaths, anarchists, militia types, hate mongers, fear mongers, conspiracy theorists, etc...will not like this news. The other 90% of America will think this is another good sign of a stabilizing American economy.

[ibsteve2u]

I hope I don't fall into any of those categories, but I see it as a temporary fix from stimulus spending.

The core issues - the diversion of too much wealth into the hands of the few, from where it is NOT reinjected back into our ecoonomy through taxes and subsequent government spending OR their buying of the same amount of consumable and durable goods as would have happened had not so many American workers lost their jobs to inequitable free trade in order to divert yet more income to those few - are still there.

[credibility2]

Obama's popular vote win was only 52% versus the estimated 47% who didn't vote for him. I think you flunked math. 90% of the popular vote didn't go for Obama, which you are inferring in your ridiculous premise.

[doc_holliday76]

by credibility2:
"The Cash for Clunkers program is one example where people turned in still usable paid off vehicles just to get a government program gimmicky discount, only to commit their financial well-being to paying off a new multi-year purchase or lease contract, and just to save a few pennies per gallon in supposed improved gas mileage."
---------------------------------





Yeah....yeah....yeah....blah....blah....blah.....just more bushevik neoconservitard rhetoric in a highly-partisan tone.

Hey -- for once, why not try to understand the huge benefits of this spur to our economy during the bush/cheney Great Recession for less than is spent in ONE WEEK -- every week -- in bush's Iraq?

Besides, there is no "supposed improved gas mileage," since the FACTS state that the average fuel efficiency savings was an average of over 10 mpg per vehicle, or an average savings of about $1,000 per vehicle -- not to mention savings in repairs and fewer emissions into an already overburdened atmosphere!

Why do you bushevik neoconservitards ALWAYS get everything WRONG?

[credibility2]

Hey moron, I'm not a Republican. What's the matter there commie, afraid that when anyone dares to criticize, question or challeng anything negative against your kumbaya socialist-bent president that they're automatically branded as a Republican, since only Republicans do things like this? Grow up and go back to your puny little corner and finish your timeout.

[midlclass]

if we could get more of the stimulus money spent on the rebuilding of our infrastructure this would put more people to work and lower the umemployment rates. large projects in the southern half of the country could be worked on year round and more seasonally as you go north. the good thing about this is you can't ship building a road or bridge oversea's this is good for our economy, which would be good for the world economy. more people working more tax revenue's more wall st spending.

[doc_holliday76]

by midlclass:
"if we could get more of the stimulus money spent on the rebuilding of our infrastructure this would put more people to work and lower the umemployment rates. large projects in the southern half of the country could be worked on year round..."
--------------------------------



Actually $100 Billion of the stimulus money was allocated to repairing our crumbling infrastructure that the neoconservitards have failed to fund, since they would rather wage endless WAR for the military/industrial complex of close-connected GREEDY cronies.

Personally, I hope that only a small portion goes to the deep RED southern evangelicals, since they already get much more of the federal money due to their welfare nature and BIG MOUTHS.

[credibility2]

All this proves is that people went back into debt, which more than likely they couldn't afford and which was part of the economic crisis. It's unlikely that the increase was due to all cash transactions by the consumer. The Cash for Clunkers program is one example where people turned in still usable paid off vehicles just to get a government program gimmicky discount, only to commit their financial well-being to paying off a new multi-year purchase or lease contract, and just to save a few pennies per gallon in supposed improved gas mileage. The government will do anything with the numbers to make things appear to be rosier than reality.

[credibility2]

Call what you want, but the simple fact remains that those that bought into this so-called stimulus shell game, went into debt for something they really didn't need. People going into debt they could ill-afford was a big part of the economic collapse. I'll bet that the majority of these morons who fell for this government gimmick just went to a "living beyond one's mean" level. How does tying up money for something they probably didn't need, versus diverting the money directly into the economy for food, clothing, and other essentials for themselves and their families. It's amazing at how moronic and dense many of you are having bought into the government myths, versus thinking them through, like the intelligent beings you're not.

[woeisme1]

Heres the link for the ACORN funding story you seek, schotzy81

http://blogs.abcnews.com/politicalpunch/2009/09/senate-votes-to-keep-housing-funds-from-acorn.html

[iloveusa2]

The consumer had to spend some money - School Started - it should not take a genius to recognize this fact. Every August when school starts parents have to buy school supplies, new uniforms, and clothes. This will cause an increase in consumer spending you can count on every year! They would have had to spend this money even if the "cash for clunkers" had not been instituted. Also, the taxpayers will still be paying for the cars traded in when the children who started school this year graduate from college. Do you really consider this a "success"?

[boiler_tech]

Do you have a clue what the article term "seasonally adjusted" means.

[doc_holliday76]

by iloveusa2:
"Also, the taxpayers will still be paying for the cars traded in when the children who started school this year graduate from college."
----------------------------------




Thanks for again proving exactly how economically-challenged the UNHINGED RABID RIGHT continues to be!

Care to tell us your predictions on how long the American taxpayers will be paying for the bushevik WARS of choice, the GOP Medicare Part-D fiasco, and the bush tax cuts for the wealthiest Americans during WAR, which total in the TRILLIONS of dollars compared to the "Cash for Clunkers" whopping $2 Billion?

You bushevik neocons continue to amaze the majority of Americans with your stupidity and complete ignorance of being able to visualize the BIG picture, especially not being able to see past the nose on your face!