Retail Sales Healthy

Retails sales looked good last month.  Remember that these data are adjusted for normal seasonal fluctuation, so we’re not looking at a sales increase simply due to the beginning of Christmas; we’re seeing a sales increase of over 5 percent compared to the same time of year in 2005.

Last month was a bit unusual because what you saw was what you got.  The sales gain was not due primarily to gasoline prices rising, nor to auto sales–it was broad-based gains.  The only exception was furniture stores, which have seen declining sales recently.  The housing slump is no doubt depressing spending on new furniture.

Business Strategy Implications:  Aside from furniture, companies selling to consumers should expect continued moderate growth.  Forget the breakneck pace that dominated in 2005; expect a continuation of the moderate growth of 2006.

Other Blogs Posting on This Topic: The Big Picture gives a good bit of context for the report.