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Retail spending an economic bright spot
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STEVE CHIOTAKIS: The warehouse chain BJ’s Wholesale Club says same store sales last quarter were up 8 percent from last year. Abercrombie and Fitch showed strong sales this morning, as well. Our senior business correspondent Bob Moon joins us now live with more. Bob, an 8 percent climb at BJ’s Wholesale — is consumer spending looking like a bright spot?
BOB MOON: Well, I hate to be the pessimist today, but take a closer look, and much of BJ’s sales rise reflects the higher cost of the gasoline it sold. Abercrombie & Fitch is out with a better picture. Its second-quarter sales were up 12 percent. This, of course, comes on the heels of yesterday’s all-important sales numbers from the country’s biggest retailer — Walmart’s U.S. sales were down slightly. Now, we heard from the Commerce Department earlier this week that retail sales were up for the new quarter, by the most in four months. But of course, that was before consumer confidence readings plunged along with the stock market.
CHIOTAKIS: And Bob, we always hear that the consumer is so critical to the economy — that it accounts for 70% of the whole economy. So does the fact that some retailers are reporting strong earnings bode well for the economy as a whole?
MOON: The picture is still fuzzy on that, too. On the one hand, Walmart says its shoppers are stretching their budgets and buying cheaper labels. And BJs announcement this hour, like Walmart yesterday, stresses the importance of expense savings. Now that can be a code word for cutting back on inventories, and squeezing more out of the workers you have. So this might not equate to more jobs. Earlier this week, investors were pumping up shares of consumer-discretionary companies — things like household goods like Procter & Gamble. So there, at least, the market has been signaling some confidence.
CHIOTAKIS: Marketplace Senior Business Correspondent Bob Moon, thanks Bob.