Adjusted for seasonal factors but not for inflation, retail sales across the U.S. totaled $357 billion in July, a 1.8% increase from June, the U.S. Commerce Department reported on Aug. 11. The increase, however, was slightly below the 2.1% gain that economists generally expected. Taking autos out of the measure and the July-from-June gain was just three-tenths of a percentage point, half of the consensus expectation, notes Merrill Lynch & Co., New York. "There was little doubt that the auto sector was where the action was for retailers in July," says Merrill, which suggests that the fast-paced U.S. housing sector "may be becoming a little fatigued." Merrill notes furniture sales were down 1.3% between June and July and building materials were off four-tenths of a percent in July.
Also on Aug. 11, the Commerce Department reported that business inventories closed out June at $1.3 trillion, unchanged from the end of May.
Separately, the U.S. Labor Department reported initial claims for unemployment insurance fell to 308,000 last week, a decrease of 6,000 claims from the previous week's revised figure of 314,000. The department's four-week moving average of initial claims, arguably a better indicator of underlying labor market conditions because it smoothes out week-to-week changes, also fell last week. For the week ending Aug. 6, the average was 309,250 claims, a decrease of 7,250 from the previous week's revised average of 316,500. The numbers suggest the overall U.S. labor market is even more stable than it was six months ago, although the manufacturing sector of the economy continues to shed jobs.
