CCIM.com Newscenter
Consumer data and fundamentals point to a renewed recovery in the retail sector after the anemic GDP growth and rising gasoline prices that defined the first half of 2011, according to Cassidy Turley. Retail sales increased 0.5 percent in July, and June sales figures were revised up to 0.3 percent. Consumers also bought more appliances, clothing, electronics, furniture, and motor vehicles in July, driving a 0.5 percent increase in real consumer spending, the largest gain since December 2009. Wages and disposable income saw their largest increase since April, growing 0.4 percent in July. A 40-cent decline in gas prices since mid-May is also good news for consumer spending, according to the report.
Household balance sheets show the clearest improvement among retail sector fundamentals, with the debt-to-service ratio falling to 11.5 percent in July. From April through July, the retail sector also experienced the strongest four-month period of employment growth since the recovery began, adding 105,000 jobs. And prior to the 2Q11 slowdown, the retail sector had seen three quarters of positive net demand, stabilized vacancy, and rising rents in primary markets. However, a net loss of 8,000 retail jobs in August, as well as a volatile stock market, could further delay the fragile retail recovery.
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