Auto Industry leads the Drop in Overall Retail Sales

May 27, 2008

The economy has been staggering recently, and of all the markets to have been hit the hardest, the automotive industry is one of them. In fact, the lagging sales of cars at dealerships has driven the overall decline in retail sales for the month of April, according to reports issued by the Government. However, sales that exclude the automotive industry have managed to surpass expectations within the same month, leading to a sense of optimism among some.

On Tuesday, The Commerce Department issued a report stating that the total retail sales for the month of April fell by about .2%, which contrasts a gain of about the same amount for the month of March. This report was shown to be in agreement with a consensus of economic experts surveyed recently.

When one looks at the issue with automotive sales out of the picture, sales in the retail sector rose by about .5% during April, which puts the month at well above the forecast increase of .2% that was expected by market analysts and even ahead of the predicted .4% gain that was revised in March.

Further corroborating the positive aspect of retail sales was the increased amount of consumer spending that was reported by retailers last week. Retailers all across America have shown much better sales in April than what was previously estimated. While some may be led to feel optimistic about this, skeptical analysts are rather hesitant.

Indeed, some experts believe that the issue of increased retail spending is hard to interpret due to the fact that prices have risen considerably in the past several months. This means that while the core numbers of retail spending have gone up in April, the amount of money people are spending is also tied directly to the prices they are paying for food and consumables in restaurants, super-centers, and grocery stores.