August retail sales are up sequentially and annually, reports Commerce and NRF

August retail sales numbers issued today by the United States Department of Commerce and the National Retail Federation (NRF) each showed sequential and annual gains.

Commerce reported that August retail sales at $444.4 billion were up 0.6 percent compared to July and up 5.0 percent compared to August 2013, and total retail sales from June through August are up 4.5 percent annually.

NRF said that August retail sales, which exclude automobiles, gas stations, and restaurants, were up 0.5 percent compared to July and up 2.7 percent on an annual unadjusted basis. NRF officials said that the July and August retail sales numbers show a consistent improvement in consumer confidence and spending, albeit they do not directly correlate with a stalled jobs report from August.

“My overall impression is that the economy is moving in the right direction but that other factors, including rising concerns over the uncertainty in the Middle East, may produce some drag,” observed NRF Chief Economist Jack Kleinhenz in a blog posting.  “We remain hopeful but cautious.”

Kleinhenz said that the rise in consumer confidence, labor markets and retail sales is encouraging however, not quite strong enough yet for consumers to go on a shopping spree.

“Until income and wages pick up, we shouldn’t expect a sustained surge in consumer spending,” he added.

As previously reported, with retail sales growth still relatively modest, there still remains a mixed bag of signals and headwinds on the economic front, including a slightly declining unemployment rate, improving consumer confidence data, as well as encouraging automotive sales and housing data.

And these things continue to occur, though, against the backdrop of sluggish GDP growth and general uncertainty regarding the economy.

Supply chain stakeholders describe the current market environment as it relates to retail supply chains as steady for the most part. With the impact of the harsh winter weather in the background, shippers are rebuilding inventories in advance of Peak Season.

Tom Nightingale, president, transportation logistics, for Genco, a Pittsburgh-based 3PL, recently told said that even with relatively modest retail sales growth, the underlying trends, as they relate to the retail supply chain, are still strong.

“One of the biggest trends or changes in the retail supply chain space is adapting to a changing set of buying behaviors,” he explained. “It is a shift that is going on in the marketplace between bricks and mortar and e-commerce and trying to effectively handle last-mile delivery in a market that is changing as fast as retail is. It is probably going through the most cathartic change we have seen in its history from a supply chain standpoint in the past few years. So, while the overall numbers may not be earth-shattering, what is going on below the waterline is definitely nothing short of phenomenal. Retail supply chain professionals are working hard to solve a puzzle that is changing daily.”

At this week’s FTR conference in Indianapolis, many speakers said that while the economy has made strides in recent months there is still a ways to go.

Bill Dunkleberg, chief economist for the National Federation of Independent Business, said at the conference that the U.S. economy is bifurcated, with consumer sentiment still not recovered from the dot com bubble of 2000. This is due, in part, he said, to a lack of confidence in the federal government being able to solve problems and the political climate hindering the ability of businesses to expand.

“The burden of government has gotten larger and that stunts growth in the form of consumer confidence,” he explained.