Retail sales surged 1.4% in July, helped by tax cuts and low mortgage rates. (The Bush Recovery!)

The Wall Street Journal ^ | August 13, 2003 | GREG IP

[Pubbie]

WASHINGTON -- Retail sales surged in July, apparently boosted by tax cuts and the peak of the mortgage refinancing boom, and adding to the evidence the long-awaited recovery has begun.

Sales rose by 1.4% in July from June, the Commerce Department said Wednesday, and sales gains in May and June were both revised upward. Excluding a 3.2% gain in auto-dealer sales, retail receipts would have risen by a still-robust 0.8%. Economists had pegged the overall gain at 1%, according to a survey by Dow Jones and CNBC.

The implementation of the federal tax, signed into law earlier this year, helped put money in consumers' pockets and boost sales. But the drop in mortgage rates to generation-lows in June was likely also a factor. Many consumers took advantage of those rates to either buy new homes or refinance existing mortgages, reducing their monthly payment. In some cases, homeowners increased their loan amount and used the proceeds to buy goods or renovate their homes. For example, sales at building-materials and garden-equipment stores like Home Depot were up by 1.3% in July, after a 2.5% gain in the prior month.

Some of that support for spending may soon ebb. Mortgage rates shot up by about a full percentage point since mid-June. The Mortgage Bankers Association of America reported that applications to refinance mortgages fell 20% last week from the previous week and are down about two-thirds from their late May peak. Applications for mortgages to buy homes dropped 10% last week but are little changed from May. Since it takes about two months to process a loan application, the effect of the drop in refinancings may not be felt until September or October.

[SNIP]

In another report, the Commerce Department said factory, retail and wholesale inventories rose 0.1% in June from May, but because sales rose 1.1%, the ratio of inventories to a month's sales dropped to 1.38 from 1.4 a month earlier, showing that stocks remain extremely lean. If sales remain strong, production will have to increase in order to replenish depleted inventories.

[Pubbie]

Daschle must be on Life Support!

[holdmuhbeer]

Where are the jobs?

[Pubbie]

Jobless claims are below 400k.

Jobs also are lagging indicators.

[BushCountry]

It only took one post (post 2) before you started to get slammed. };O)

I was going to let you know that you are asking for trouble, the doom and gloomers are lurking.

[Pubbie]

"It only took one post (post 2) before you started to get slammed."

This is nothing - you should see the McClintock vs Arnold Threads!

[Eva]

How's the stock market doing today? I haven't checked.

[DiamondDon1]

Only 1.4 percent???

Is that all???

If we did not have the Bush Tax Cut, it would have been 10 percent!!!

OOPS, so terribly sorry, I was reading my DemocRATic talking points...(never mind...)

DD

[Pubbie]

The market is down a bit, but It's only about 50 points from a 52 week high.

[SolutionsOnly]

Yes, good news is trickling out on the economy - but we need a lot more of it. We're not recovered yet. A Dow at 10,000 is what I'm looking for. That would take ALL the wind out of the Democrats' sails.

[ladtx]

Guaranteed the DNC is working overtime to get out tonights talking points for the talking head shows to de-link these numbers from the Bush administration.

[Paul Atreides]

You forgot to include that, according to Chelsea Clinton, the tax cut caused 9-11.

[LibertyAndJusticeForAll]

We're not supposed to have jobs anymore. The Trade Act of 2002 included expanding provisions for more government handouts to provide for the fully expected resulting unemployment:
http://www.freerepublic.com/focus/f-news/962929/posts

[BushCountry]

If we can keep and maintain above 9,300 for a few days, I think 10,000 will be the next barrier.

The good news lately.

GDP up and the most pessimistic prediction is growth over 4% next year.  Some predictions are over 6%.

• Businesses spending on equipment and software in the first three months of this year, boosted such investment in the second quarter at a sizable 7.5 percent rate.
• Spending on new plants, office buildings and other structures, businesses boosted this spending by 4.8 percent in the second quarter.
• Corporate profits have risen five straight quarters for Standard & Poor's 500 companies.
• The US service sector surprised experts with a fourth consecutive month of growth in July.
• Demand for U.S. manufactured goods rose at the sharpest rate in three months in June.
• CEOs saying they're worse off now than they were 6 months ago has dropped from 51% to 26%.
• Companies' unit labor costs, meanwhile, fell at a rate of 2.1 percent in the second quarter.
• The average forecast called for third-quarter U.S. gross domestic product to grow at a 3.7 percent annual rate.
• U.S. retail sales posted an unexpectedly strong advance in July, as spending on a broad array of items shot up, the government said on Wednesday in a report that bolstered hopes of a faster economic recovery.
• Inventories for the last couple of months are low.
• World air traffic is forecast to begin a gradual recovery next year, after three years of recession, holding out hope for an end to the worst financial crisis ever suffered by the global airline industry.

[Lazamataz]

Jobless claims are below 400k. Jobs also are lagging indicators.

So where are the jobs?

[smoothsailing]

Yeah, but wheres bin Laden?

Where's Saddam?

sarcasm off.

Actually, I know where they are.They are holed up in New Mexico with the Texas dingbatocrats.

[HurkinMcGurkin]

Retail sales surged in July, apparently boosted by tax cuts and the peak of the mortgage refinancing boom,

Its not exactly good news if the retail sales "surge" was caused more by the refinancing boom than the tax cut.

[Pubbie]

"So where are the jobs?"

Why don't you ask 93.8% of your neighbors because that's what how many people are Employed nationally?

[Pubbie]

"They are holed up in New Mexico with the Texas dingbatocrats."

LOL!

[LibertyAndJusticeForAll]

Good catch. It sounds more like a last gasp for those re-fi's that are cash-outs to stay afloat until they are again fully employed.

[Bluntpoint]

"Daschle must be on Life Support!"

http://www.wavsource.com/news/20010911/bushw_anthrax.wav