Economic Numbers Mixed, Hope Still On The Horizon
July 16, 2001
Recently released economic numbers show the U.S. economy is slowly chugging along, but there are some indications things may be getting ready to turn around.
Retail sales in June increased for the second month in a row, up 0.2% following a revised 0.4% gain in May. Helping drive the increase was a 1.5% increase in new car sales, good news for car haulers. However, when car sales numbers are removed from the equation, overall retail sales in June fell 0.2%, the first decline in three months.
Other big gainers for the month include sales at electronics and appliances stores, increasing 1.1% after being unchanged in May, while general merchandise sales were up 0.4% after falling 1.3% the month before.
The Associated Press reports that some analysts expect the second quarter of the year to be the weakest for the U.S. economy this year. First quarter growth registered 1.2%.
There are also predictions the economy may be about to turn around.
The Producer Price Index, essentially wholesale prices, fell 0.4% in June and registered its biggest drop in more than two years, driven mainly by falling energy prices, from electricity, to diesel to gasoline. While this might normally indicate weaker demand for products, this, along with lower interest rates and tax rebate checks expected by many Americans starting this month, could get consumers back on the bandwagon when it comes to spending. And they may already be thinking about doing just that.
The University of Michigan’s preliminary index of consumer sentiment in July increased from June, indicating consumers' attitudes about the economy and their own financial future are getting better.
Meanwhile, the U.S. Commerce Department reported Monday that business inventories remained virtually unchanged during May, for the fourth month in a row.
This news, when combined with news of increased sales in June, may indicate manufacturers could soon boost production, translating to more goods for trucking companies to haul.
Bloomberg reports the rise in sales pushed the inventory-to-sales ratio, which measures the length of time goods remain unsold, to the lowest this year, a sign companies are making headway in bringing stockpiles in line with consumer demand.