August Retail Sales Could Forecast Holiday Season

August 29, 2006

August Retail Sales Could Forecast Holiday Season

Retailers and market-watchers are eagerly awaiting August sales results, which are expected to indicate the health of the retail industry during the holiday season this year. Many major retail chains plan to release results next week.

Various indicators hint at a slowdown, according to Reuters. The MasterCard SpendingPulse, a regular economic study, shows a five-month decline in retail sales compared to the same period last year, and spending on luxury items has dropped for the past two months. At the same time, the Conference Board reports its consumer confidence index dropped to a nine-month low, suggesting a blow to consumer spending in coming months.

Consumer spending might be curbed by worries over rising interest rates, higher energy prices, slowing home sales and war in the Middle East, Reuters reports. Analysts say middle-income families are beginning to be especially conscious of how they're spending their money, and say that traffic at stores and malls is lighter around the country.

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