Sales For Retail and Food Services Rise

The Department of Commerce’s encouraging report on sales for retail and food services triggered a rise in the U.S. stock market, with the Dow gaining 95.38 points to close at 13,424.23.  Sales for September topped off at $412.9 billion, up 1.1% from August, and up 5.4% from a year ago.  For the first time, sales have remained above $400 billion each month of the year, and four years of increases has erased the $40 billion decline following the recession. The retail and food services report covers a wide variety of American businesses, such as auto dealers, grocery stores, department stores, and therefore is an important barometer for judging the health of the economy.  Car and auto parts dealers, which contribute $75 billion to the overall figure, have seen sales rise 8.7% since last year, and gas station sales have increased 3.9% from the previous year, indicating that Americans are steadily returning to the pump.  After plummeting over 41% after the recession, gas station sales have recovered to 2008 levels of $47 billion.   

U.S. Department of Commerce Reports Large Decrease in American Durable Goods

The Department of Commerce released its monthly report on Durable Goods Manufacturers' Shipments this past Thursday.  In August 2012, new orders for manufactured durable goods fell $30.1 billion (13.2%) to $198.5 billion.  This decrease represents the most severe drop since January of 2009.  While the durable goods report is highly volatile and not representative of the economy on the whole, it does provide insight into the performance of manufacturers that produce high value-added goods such as cars, turbines, semiconductor equipment, computer products, and electrical equipment.  Additionally, the Census utilizes the report in its Gross Domestic Product estimates.  American durable goods manufacturers had previously enjoyed three consecutive months of increases, and the over $230 billion value of shipments in July 2012 marked the first time the figure had recovered to pre-recession levels. The drastic 13.2% reduction, while not necessarily the best indicator of long-term trends, can be utilized to make short-term earnings predictions regarding the industries represented in the report.  An important note regarding this report: civilian aircraft orders fell significantly, and burdened the overall figure.  Orders for nondefense capital goods excluding aircraft increased 1.1% in August, and this important portion of the report is a good barometer of American business; thus, despite the 13.2% overall drop, many manufacturers did in fact experience a healthy increase in orders.

Traffic Fatalities Surge Upwards

The National Highway Traffic Safety Administration (NHTSA) reports that 7,630 people died in motor vehicle accidents during the first quarter of 2012.  This figure represents a 13.5% increase from the 6,720 traffic fatalities during the first quarter of 2011.  The NHTSA notes that the number of traffic fatalities is typically lowest during the first quarter of each year due to inclement winter weather, though this year’s winter was unusually warm – a possible explanation for the jump in fatalities.  The 7,630 fatalities is quite low compared to the first three months of previous years, however.  Just six years ago in the first quarter of 2006, 9,558 Americans lost their lives in traffic accidents, but since then, fatalities fell considerably.  The NHTSA attributes that consistent decline to drops in crashes involving young drivers.