Retailers subdued for 3Q
Staff -- Kids Today, 10/1/2006
For 2006, a net of 45% of retailers told Kids Today they expect to end the year with higher sales than 2005. They were responding to an exclusive Retail Merchandise Mix survey reported on pages 6 and 8. One-third expect sales to be flat, matching anecdotal reports received by Kids Today editors.
Consumers are more confident. The latest Consumer Confidence Index from the Conference Board holds promise that forecasts for higher sales for the year may be close to the mark, though the gains may not be spectacular.
Lower gas prices, low unemployment and a calmer than expected hurricane season apparently boosted consumer confidence in September. The Conference Board's Consumer Confidence Index, which decreased sharply in August, posted a gain in September. The Index now stands at 104.5, up from 100.2 in August.
Consumers' outlook for the next six months was less pessimistic in September than in August. Those anticipating business conditions to worsen decreased to 10.6% from 12.9%. Those expecting business conditions to improve, however, remained virtually unchanged at 16.3%.
The outlook for the labor market improved moderately. Those expecting more jobs to become available in the coming months edged up to 14.4% from 14.2% in August. Those expecting fewer jobs decreased to 17.1% from 18.1%. The proportion of consumers anticipating their incomes to increase in the months ahead rose to 19.7% from 17.9%.
A strong labor market also bodes well for retail sales. The hiring outlook for the four U.S. regions is similar to what employers reported in the third quarter and for the final months of 2005 in the Midwest, South and West according to the latest Manpower Employment Outlook Survey.
Looking to 2007, retailers said several factors could have a less than favorable impact on business, including the overall economy, fewer housing starts, gas prices, the continued growth of Internet sales and the increased prices of raw materials.
| March | 4.7% |
| April | 4.7 |
| May | 4.6 |
| June | 4.6 |
| July | 4.8 |
| August | 4.7 |
| Source: U.S. Bureau of Labor Statistics |
|
| $2.38 | price per gallon as of 9/25/06 | $2.47 | $2.46 | $2.31 | $2.21 | $2.27 | $2.69 | $2.72 | $2.76 |
| % change from | |||||||||
| -4.8% | week ago | -4.8% | -5.5% | -6.2% | -4.8% | -4.9% | -3.6% | -3.1% | 3.1% |
| -15.2% | year ago | -13.7% | -14.8% | -18.2% | -18.8% | -16.7% | -5.8% | -7.1% | -6.3% |
| U.S. | New England | Central Atlantic | Lower Atlantic | Midwest | Gulf Coast | Rocky Mountains | West Coast | California | |
| Source: Energy Information Administration, U.S.
Dept. of Energy |
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