The road to recovery, as they might be saying on the campaign trail, is a hard one and expecting a sudden change in fortunes is fool hardy. Ever since the global financial crash in 2008, governments, political leaders and all sorts of economic and financial wunderkinds have been struggling to recover, the bite being still as wicked as before. The United States, which suffered the most during the global economic recession has been trying to hobble its way back to prosperity but employment data from the last couple of months has been none too healthy with the unemployment rate almost fixed at 8 per cent (and rising) and now, figures released by the Commerce department show that consumers are being just as conservative as before, retail sales down again for the third month in a row.
According to figures released by the US Department of Commerce, retail sales in the country fell by 0.5 per cent from May, showing a downward trend that has continued for three months straight. The figures suggested that retail sales had not been down so consistently since 2008, when the recession was at its height.
Nearly all sectors were affected by this fall in consumer purchasing and spending. So-called ‘Key Goods’ such as cars, electronics products, building and gardening materials all saw a decrease in purchases. For the automobile industry, sales of both cars and car parts fell by some 0.6 per cent, while related industries such as gas stations, showed a decrease in purchases by around 1.8 per cent. The furniture and building industries saw even steeper falls, pointing towards the clearly unrecovered housing industry that all but provided the impetus for the financial crash. The medicine and associate industries saw a 0.7 per cent fall but Fast Moving Consumer Goods (FMCGs) such as food beverages were almost stable, showing close to ‘flat’ spending.
Sales figures from retailers also showed declines, with nearly all the major retail operators such as Costco Wholesale, Target, and Macy's showing a decrease in sales for the month of June.
Similar data released by the Institute of Supply Management showed a that manufacturing demand was also on the decline with its purchasing managers index showing that manufacturing demand had decreased by nearly 50 per cent at 49.7 per cent for last month, with any figure below 50 indicating a contraction in demand.
Ensuing, the International Monetary Fund (IMF) revised its growth forecasts for the United States, readjusting them to 2 per cent for the present year and 2.3 per cent for 2012.
Investment strategist at Plante Moran Financial Advisors, Jim Baird commented on the new figures saying, "Evidence is increasingly clear that the US economy is slowing.”