Mann at Work

Nov 21 2007 7:02AM | Permalink | Email this | Comments (0) |
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By Jim Haughey

Recent statistics show Canadian and U.S. consumers continue to spend, so retailers such as Wal-Mart anticipate a happy, healthy holiday season.

However, the Conference Board’s October 30 report shows that U.S. consumer confidence has waned slightly. This means that the retailers’ optimism may a little premature, since there’s no guarantee that the subprime crisis doesn’t have some pain still to inflict on U.S. retail sales.

Chief economist Alex Carrick discusses three other factors besides consumer confidence that can have an effect on retail sales: the “wealth effect,” the “housing market effect” and the “Lower-valued U.S. dollar effect.”

U.S. retail and food services sales up in October
Advance estimates of U.S. retail and food services sales in October were released on Friday, November 16. They show a slight increase from the previous month and a healthy increase from a year ago.

Advance estimates of U.S. retail and food services sales* for October were $380.3 billion, up 0.2% from the previous month and 5.2% above October 2006.

Since 5% is usually considered a good benchmark figure for retails sales in both Canada and the U.S. is 5.0% year over year, the 5.2% U.S. figure is a quite healthy rate of growth.

Canadian total retail sales up in August
After two consecutive decreases in June and July, total retail sales in Canada increased 0.7% in August to an estimated $34.5 billion. Although sales in all eight retail trade sectors were up, sales by new car dealers (+3.0%) led the way.

The year-over-year increase from August 2006 to August 2007 was 4.3%.

Note that it is difficult to compare Canadian retail sales figures for the same period as the U.S. advance numbers, since the Canadian numbers are not provided as promptly by Statistics Canada. The last report — for August 2007 — was released on October 24. The September numbers won’t be available until November 21.

*Adjusted for seasonal variation and holiday and trading-day differences, but not for price changes.