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Consumers boosted spending in April to the highest levels in more than a year, accelerating their turn toward online shopping and widening the divide between in-store retailers and Internet outlets pitching lower prices and convenience.
While data from the Commerce Department on Friday showed overall retail sales rose 1.3% in April from a month earlier, the category that includes shopping on Amazon.com Inc. and rival websites and apps grew 2.4%. And in the past year, Internet and catalog sales have grown more than three times as fast as overall sales, up 10.2%. Department-store sales, meanwhile, sank 1.7% over the past 12 months.
Results from the retail sector this past week showed how the shift is knocking down major companies despite resilience in the broader economy. Major retailers including Macy’s Inc., Kohl’s Corp. and Nordstrom Inc. this week reported sharply lower sales and profits, while Gap Inc. said it was considering closing more stores after sales continued to sink.
I'm not sure if commercial rents are going through the same thing residential rents are (in my entire state, residential rents have skyrocketed). If they are, that's a bigger problem for retailers long term.
So increasing retail sales is a good thing? Maybe but a lot of the sales just indicate waste. Nothing is more obvious than the $250 billion/year fashion industry. It is hard to say whether we should call it apparel or fashion. I chose fashion because the bulk of the expenses do not reflect utility but are due to fads and fashion. We rarely throw away our clothing because it is worn out. Instead we are tired of it and it no longer conforms to the current fashion and styles.
You would think we would have learned a lesson in 2008 and we would now be more cautious about overspending and waste. There was merely a brief drop and in fashion sales and then a rapid return. The expenditures are even more deceptive. Clothing prices are very low and continue to decrease. I pay the same $1.25 for fruit of the loom underwear that I paid in 1970. I can buy a heavy weight cotton or blend T shirt for under $2 or for about $4 with a pocket. I pay $15 for jeans or cargo pants and that price has not increased in decades. So it is obvious that we are buying more clothes than ever and throwing them away at a rapid rate.
Maybe it would be a good thing if a few high priced clothing stores went under and we started becoming more careful about how we spend our money.
If someone might help my ignorance, that would be greatly appreciated- the information states that retail sales are up, but I would suspect that much, if not most, of the actual goods sold were manufactured outside of the US. If this is the case, it would appear that this represents a fair amount of money flowing out of the US, and really should not be construed as being as good news as it appears. If someone might correct me on this, that would be most helpful.
If someone might help my ignorance, that would be greatly appreciated- the information states that retail sales are up, but I would suspect that much, if not most, of the actual goods sold were manufactured outside of the US. If this is the case, it would appear that this represents a fair amount of money flowing out of the US, and really should not be construed as being as good news as it appears. If someone might correct me on this, that would be most helpful.
There is a lot more to retail sales than just the manufacturing of those goods. Look at my example for fashion/apparel sales. There is a huge American component with nearly a $100 billion dollar portion in the NYC fashion industry. Clothing design, trend setting, marketing are largely performed by US businesses. The retailers are additional US businesses. Only the manufacturing is done overseas. If we were buying utilitarian items perhaps the manufacturing would be a major factor. We are spending our money on fashion design, marketing and markups by the retailers.
I would suspect that much, if not most, of the actual goods sold were manufactured outside of the US.
Nope. The way to think about this is that our trade deficit is only ~3% of GDP. And the majority of GDP is consumer spending.
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