Note:

There has been a report in the financial news suggesting that the release of economic indicator reports by the Commerce Department will be curtailed due to the government employee furlough. It is not certain what impact the furlough will have on other government agencies that release economic information. In any case, we'll keep the old crystal ball running at full power and keep you informed of whatever economic news comes into view. If the flow of information dries up completely, I've got a couple ideas about using economic data in your day-to-day investment decisions, and I'll pass them along to you in place of the daily indicator analyses.

Meanwhile, back at the Department of Commerce, the folks at the Census Bureau were able to sneak out the October Advance Retail Sales Report early today before they were sent home. Today's release estimated that total U.S. retail sales for October declined by 0.23% from September. When sales of autos were excluded, the decline was 0.54%. The figure for the August-to-September change in total retail sales was revised downward from +0.26% to +0.12%. From October, 1994 to October, 1995 total U.S. retail sales rose by 3.02%.

Back in September, when I first began to write about the monthly retail sales data, I suggested that, because of short term uncertainties in the data, it would be better if we examined the changes in retail sales over a longer period of time -- like one year. The following table shows the year-to-year changes registered in total U.S. retail sales for the past five months.

                           June    July     Aug.    Sep.    Oct.
        Annual % Change
      Total Retail Sales   +6.27  +5.73    +5.02    +4.62   +3.02

It's easy to see what is happening. Even though year-over-year sales have increased every month, the increases have become smaller and smaller. This slowdown in the rate of increase of retail sales is yet another symptom of the "tapped-out consumer" syndrome. Consumers are becoming less able to squeeze any more bucks out of their budgets for discretionary spending (See Economic Indicators for 11/7 and 11/8 for related articles).

Byline: Lafferty (MF Merlin)