An 0.6% gain in June retail sales was powered by vehicles and higher gas prices but the gain now leaves six month growth back in the black after standing at (an annualized) -4% in May and -14% in March. We've noted the retail sales improvement in recent posts but a broader measure of sales is also on the mend.
Business sales combine sales from retailers, wholesalers and manufacturing and were released with today's report on inventories. The modest -0.1% decline in May sales was the smallest in ten months as all three recover from the Q4 plunge.
Despite the continued strong declines in payrolls, a turn in trend for industrial production is all that's needed before the recession is considered unofficially over. Business sales and the tax/refund induced rise in incomes leaves only payrolls and industrial production on the short list to signal a return to growth. The official word from the National Bureau of Economic Research will arrive well after the recovery has started, as was the official word on the start of the recession.
Tomorrow's report on industrial production is expected to show a decline of -0.6%, the smallest of the last eight months as the stabilization seen in factory orders (see June 30 post) is passing through to steadier production.
A brief note on consumer credit, which by my records is showing the weakest annual growth since WWII. Declines in seven of the last eight months leave a -2% decline from a year ago tied to annual declines in both credit cards and non-revolving credit (other non-mortgage household lending). Banks remain tightfisted as reduced consumer demand has a part in this as well.
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