Retail Sales Dive, Wholesale Prices & Unemployment Fall
December 13, 2001
Retail sales have taken a beating while prices at the wholesale level and unemployment have improved.
That’s according to separate reports released by the federal government Thursday morning.
The U.S. Commerce Department reported retail sales skidded a record 3.7% in November, marking a bad start to the holiday sales season while setting a record. The figure follows a 6.4% upturn in October, which was another record.
Much of the drop was due to a fall-off in auto sales. After increasing more than 24 percent in October, they fell almost 12% in November. Excluding these sales, retail purchases still were weak for November, posting a 0.5% decrease, following a 0.8% increase in October.
The rollercoaster in sales is reflected in freight volume. "Freight volume is getting pushed up and down seemingly randomly," says Newport Senior Economist Jim Haughey. "September experienced a big drop. October had an even bigger gain in the rebound from the September tradegy and aggressive auto marketing. Now November has experienced a significant drop for auto carriers, with the rest of freight reasonably steady. December is likely to be a repeat of November." Haghey predicts a steadier month-to-month rising trend should take hold in January.
Meantime the Labor Department reported wholesale prices fell during November, with the Producer Price Index falling 0.6% after a 1.6% drop the month before. Excluding food and energy products, so-called core wholesale prices moved up 0.2% after a fall of 0.5% in October.
While the news means inflation is likely under control, the Labor Department noted, weak demand was one of the main reasons prices remained in check.
The price of passenger cars and tobacco products helped boost the core rate. During November tobacco products prices increased 1.8% while passenger car prices posted a gain of 0.9%. Energy prices dropped 3.8%. Food prices fell 0.8%.
The Labor Department also reported unemployment in the U.S. is improving. The number of people filing first time claims for unemployment benefits fell by 86,000 last week, the biggest weekly decline in nine years.