The latest numbers from the Department of Commerce show that now, for the second month in a row, retail sales are up. In May, retail sales gained 0.5%, and sales gained 0.6% in June.
While economists had expected another rise, they had predicted it to be slightly less of a gain. Bloomberg reported, “Retail sales were projected to rise 0.4 percent in June after a 0.5 percent gain in May, according to the median estimate of 74 economists in a Bloomberg News survey.”
Economists had estimated retail sales not including auto sales would have been 0.5%. Instead that number came in at 0.3%, showing that auto sales had a larger impact on the sales report than anticipated.
CNNMoney reported that the increase in sales is largely due to car, gas and electronics sales: “The report showed auto sales rose 2.3% in June while gasoline station sales jumped 5% in the month. Electronics sales rose 0.9%, while sales at sporting and music stores also increased 0.9%.”
According to Reuters, “A separate report from the Labor Department showed producer prices jumped 1.8 percent last month, far outstripping forecasts for a 0.9 percent gain.” This is a sign that inflation is finally kicking in.
Editor Justice Litle of Macro Trader has been pointing to approaching inflation for some time now. He recently wrote about the differing opinions of economists, some who predict inflation and others who predict deflation.
Justice wrote, “Those who see deflation point to a collapse in credit and sharp downward lurch in wages. They argue that the vicious contraction in global output – the economic equivalent of a massive heart attack – has taken the all-important “money multiplier” effect and thrown it into reverse gear.”
Justice, on the other hand, “plants his feet squarely in the inflation camp.” He says, “It seems clear we will reach the inflation destination by one of two roads. Either the global economy comes roaring back with a vengeance, or the crushing weight of debt (perhaps further weighted by a second banking crisis) spurs mass-monetization of government debt.”
The only caveat, Justice says, is when this inflation will kick in. But, it is only a question of when. Justice Litle has been getting his readers into position to benefit from the approaching inflation. Learn more here…
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