Ahead Of The Bell: Retail Sales
The Associated Press
06/11/09 - 06:17 AM EDT
WASHINGTON (AP) Retail sales likely rose in May after falling for two straight months, amid signs that the worst of the recession may have passed.
Wall Street economists surveyed by Thomson Reuters expect retail sales increased 0.5 percent in May, compared with declines of 0.4 percent in April and 1.1 percent in March. The Commerce Department is scheduled to release the report Thursday at 8:30 a.m. EDT.
Retail sales increased in January and February after falling for six straight months, raising hopes that the economy's crucial consumer sector may be stabilizing. The setbacks in March and April clouded that prospect. With many families saving more and spending less, worried about layoffs and shrunken home equity and retirement accounts, the start of a sustained recovery appeared to be delayed.
Now consumer confidence appears to be rebounding. The Conference Board's Consumer Confidence Index for May rose to its highest level since September.
A Federal Reserve snapshot of economic conditions issued Wednesday found that five of the central bank's 12 regions said the economy's downward trend "is showing signs of moderating," and hopes for future business activity improved.
The Fed survey is consistent with observations from Fed Chairman Ben Bernanke and other central bank officials that the recession which started in December 2007 and is now the longest since World War II is loosening its grip on the economy.
Many analysts predict the economy is sinking at a pace of between 1 and 3 percent in the current quarter. If they are right, that would mark a big moderation from the steep declines seen since last fall. The economy shrank at a pace of 6.3 percent in the final quarter of last year, and by 5.7 percent in the first three months of this year. It marked the worst six-month performance in 50 years.
The improvement in consumer confidence hasn't been fully reflected yet at the cash register, with job worries and falling home prices still weighing on Americans as they shop. Many U.S. retailers posted disappointing sales in May, according to industry data released last week. Food and other necessities remained high on shoppers' lists.
The tally by Goldman Sachs and the International Council of Shopping Centers showed that overall same-store sales fell 4.6 percent, worse than the 3 percent drop predicted. Sales at stores open for at least a year are considered a key barometer of retail health.
The May results excluded Wal-Mart Stores Inc., the world's biggest retailer, which in recent months has boosted total results but has stopped reporting monthly figures.
It was the 10th straight month of same-store sales declines. Several retailers, however, including BJ's and TJX Cos., had improved traffic in May.
