A Tale Of Two Stories About The Economy
By Rob on Economy
Say Anything
Its amazing how the same information can sound both encouraging and discouraging, based solely on who’s reporting it.
Here’s Reuters on new data just released from the Commerce Department:
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WASHINGTON (Reuters) - U.S. retail sales dropped by a larger-than-expected 2.1 percent in August, the sharpest drop in almost four years, after car purchases collapsed from July’s near-record level, government data showed on Wednesday.
Sales excluding autos were buoyed by high gasoline prices, however, climbing a stronger-than-expected 1.0 percent.
The Commerce Department said it could not quantify the impact of Hurricane Katrina but said it would have been small because the storm-affected region accounted for little more than 1 percent of total national sales.
“Moreover, the effect of the hurricane on the national retail sales estimates in August would be much less, since the hurricane only impacted the last few days of August,'’ the department said in a statement, noting that it had to estimate some of the results for August because some firms had problems in reporting.
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Gloomy, no?
Now here’s Bloomberg:
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Sept. 14 (Bloomberg) — U.S. consumers kept spending on goods other than automobiles, and factories kept humming last month, evidence the economy was able to withstand record fuel costs prior to Hurricane Katrina.
A predicted slowing in auto sales pulled August retail spending down 2.1 percent, the biggest drop since November 2001, the Commerce Department said today. Economists instead focused on a 1 percent gain in all other purchases that was twice as much as expected. The Federal Reserve said today that manufacturing output rose 0.3 percent last month, contributing to a 0.1 percent gain in industrial production.
“The consumer was in fairly good shape before Hurricane Katrina,'’ said Dean Maki, chief U.S. economist at Barclays Capital in New York. “Sales were strong virtually across the board.'’
Sales of furniture, electronics and personal care products rose last month even as auto sales slumped after a discount- driven surge in July. Rising employment and incomes may be enough to keep consumers spending even amid a further jump in fuel costs after Katrina struck Aug. 29 and disrupted energy production in the Gulf Coast, economists said.
“While consumers are forking over a lot of money on gasoline, they continue to spend elsewhere,'’ said Joseph LaVorgna, chief U.S. fixed income economist at Deutsche Bank Securities in New York. “This tells us that job and income prospects are better than what is commonly understood.'’
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Same data, entirely different story.
Funny how that works, isn’t it?
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