Retail’s down, consumer hopes are up?
TEXT OF STORY
BOB MOON: Economists came out with bunch of data today, which fueled some of that superstition we were talking about. For one thing, Americans shopped a lot less. The Commerce Department said retail sales posted their steepest drop in nearly two years in June, compared to May. But, at the same time, consumers said they’re much more optimistic about the state of the economy and their own pocketbooks. We asked New York bureau chief Jill Barshay to sort this out for us.
Jill Barshay: Rising gas prices and the slumping housing market kept Americans out of the stores in June. Peter Kretzmer is a senior economist at the Bank of America.
Peter Kretzmer: The weak spending was pretty much everywhere. It really extended across clothing and electronics, general merchandise stores, and furniture, as well as the auto area.
But now that gas prices have come down a bit, Kretzmer says Americans are feeling better. The University of Michigan released its consumer sentiment survey today. It says Americans are feeling more confident about their finances than they have in the last six months.
Scott Krugman is a vice president of the National Retail Federation. He expects Americans to start hitting the stores again.
Scott Krugman: Just a few weeks ago, consumers were lined up around the corner to buy a $600 cell phone from Apple. That tells me that consumers are still willing to spend. And I think we’re going to see a lot of that happen as the back-to-school promotions begin to roll out.
The National Retail Federation predicts that retail sales will be up 4.8 percent this year.
In New York, I’m Jill Barshay for Marketplace.
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