Sales Slump In September
by October 20, 2008 12:00 am 59 views
Several weather metaphors have been beaten into the ground as media tries to describe what is happening in the financial markets, but there is now a statistical equivalent to natural disaster.
In a headline that should fit into the “dog bites man” category, retail sales for September slid by the greatest amount in three years. Not since Hurricane Katrina has the retail industry taken such a beating.
Hurricanes played a role this September as well with Wal-Mart Stores Inc. reporting that same-store sales were negatively affected by 0.4 percent after closing 361 stores when Hurricanes Gustav and Ike battered the Gulf coast.
The announcement that sales declined a greater-than expected 1.2 percent sent the market into another tailspin.
In the eye of the storm, however, there is a calming effect of plummeting gas prices and related inflation. Gas prices have declined by more than 25 percent since the July peak and are likely headed even lower. The dip in gas prices caused the closely-watched Consumer Price Index to decline by 0.1 percent in September, welcome news for Americans who have seen inflation rise at an annualized rate of 4.5 percent in 2008.