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News Link • Economy - Economics USA

Retail Sales 'Purportedly' Rise at Fastest Pace in 4 Years

Not only is it easy to beat record low comparisons of a year ago, same store sales are rising in part because stores are closing like mad. Circuit City closed its entire chain in bankruptcy, thus some of those sales went to Best Buy, some other places, and some sales simply vanished. More importantly, states have been reporting declining sales tax collections for the entire year. Admittedly state tax collection numbers are frequently delayed by a couple months, but that still does not jibe with overly bullish comments about sales over the first five months of the year from the International Council of Shopping Centers. Assuming you believe the fantasy sales reports, a more important question is "where to next?" Where Next Signpost Home tax credits are dead along with housing starts. New home sales cratered a record 33% in May, to a record low annual rate of 300,000 units. See Inane Thoughts of the Day: CNNMoney Article says "Housing Shortage is Coming" for thoughts and details Massive numbers of state layoffs are coming even if Congress throws the states a small bone Global growth is slowing led by Europe and Asia (that will affect hiring plans) Anemic consumer sentiment numbers took a turn for the worse The ECRI's Leading Economic Indicator has fallen like a rock. See ECRI Weekly Leading Indicators at Negative 6.9; How Likely is a Double Dip

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