Leading US ICSC Sales Indicator Unexpectedly Hits 15-Month High

[DailyFx]

Though consumer confidence has plunged to lows not seen in over a quarter century and spending has been hit by fading home equitiy, high lending costs and cooling wage growth, retailers are still pointing to relatively strong sales - albeit in very specific sectors. The International Council of Shopping Centers' (ICSC) Chain Store Sales survey reported a 4.3 percent rise in retail activity in the year through June. This was the strongest pace of growth for the group March 2007 and well above economists' restrained expectations of a modest improvement to a 3.3 percent clip. However, this report may not portend a blowout reading from teh government's Advanced Retail Sales reading for the same month. The ICSC survey pool only included 38 retailers; and the headline number is adjusted to exclude sales activity from those stores that had opened or closed during the period. Taking a more encompassing read, total store sales for the same period cooled to an 8.7 percent clip from 9.1 percent in the May reading. Furthermore, the details from the report shows much of American's spending isn't in growth friendly discretionary items. Sales of apparel through the year dropped 4.6 percent, department store purchases fell 4.1 percent, luxery items tumbled 10.9 percent, and furniture plunged 26.2 percent. With Americans looking for a bargain, wholesale sales actually rose 9.0 percent - a reading confirmed by Wal Mart's strongest sales this past quarter in four years. - John Kicklighter, Currency Analyst for DailyFX.com