Is the American “money spending ability” bouncing back? Data put forth by the Commerce Department showed a profitable upswing in retail sales this July!!
Given that consumer spending edged upwards in July, is this jubilation time for the dwindling financial status of the United States business? Should the nation consider this as a "much needed" improvement in the recession status?
A much cherished “July”
July showed an extra boost in sales as compared to the last five months. This maybe the answer to the slumped economy of the nation. There was a 0.8 percent rise in the sales figures in July as seen against those of the previous month.
All the main categories like automobiles, clothing, furniture, garden equipment, electronics, sporting goods, and building materials had the people reach out for purchases,thus boosting up the slumped economy.
July showed the first gain in four months as June had highlighted a fall of 0.7 percent in the retail sales figures.
The Financial Markets
The economic markets opened with elevated figures. The first hour of trading showed a high of 21 points to 13,190 according to the Dow Jones Industrial Average.
The data records also point towards a surge in the Broader indexes. Nearly 163,000 job opportunities had been floated showing an upward trend in job growth.
"Lower gas prices, a nice rally in stocks and stronger job growth ... helped boost consumer spending," claimed Jennifer Lee the senior economist at BMO Capital Markets.
Lee felt this was a good beginning but the employment opportunities need to show more promise. However, the overall economy is still swinging in doldrums as the annual growth rate is only 1.5 percent from April to June.
The wholesale prices amplified only 0.3 percent in July. The low price of energy compensated for sharp gains in food costs, light trucks and cars claim the Labor Department.
Statistics reveal that wholesale rates showed only 0.5 percent boost in the last 12 months, the lowest in the country since October 2009.
Optimistic sale reports were put forth by the world’s best sales home-improvement retailers, Home Depot Inc in their second quarter.
Consumer spending drives American economy
The government depends on the consumer's spending power to judge the financial status of the country. The consumer purchases show an upward trend and the government rates 70 percent of purchase ability to the economic upliftment.
Savings have always been passe for the Americans but lately they have also woken up to the importance of savings. This is evident from the fact that the saving rates have increased to 4.4 percent in June this year.