Monday, May 13, 2013

Lower Gas Prices = Higher Retail Sales

We need more energy development, refining, distribution and exports in America to help our struggling economic recovery. However, the White House and the greenies continue to either "slow play" or resist approval of the Keystone XL Pipeline and similar initiatives.

Meanwhile, the economy muddles through and the latest evidence suggests that the correlation between lower gas prices and higher consumer spending for other items is very real. It's also common sense, apparently something not much used by the current Washington based government knows best gang.

Retail Sales Rise 0.1%, Beating Expectations has the morning's news on last months retail sales. They were better than appears at first glance and the energy to other expenditures relationship provides the answer as to why:

"U.S. consumers spent more at most retailers in April, offsetting a big decline in sales at gas stations, signaling that shoppers are gaining confidence about the economic recovery.

Retail and food-service sales grew by 0.1% to a seasonally adjusted $419.03 billion, the Commerce Department said Monday. The figure was up 3.7% from a year ago.

The report beat expectations—economists surveyed by Dow Jones Newswires had forecast a 0.4% decline. Retail sales are a key component of consumer spending, which accounts for more than two-thirds of demand in the U.S. economy.

Spending at gasoline stations dropped 4.7%, the largest decline since December 2008. That reflected lower regular gasoline prices in April. The decline is expected to continue for the summer vacation season, according to the Energy Information Administration.

Sales rose for automobiles, building materials, at clothing stores and shopping online, the report said. Those figures indicate consumers are likely spending their discretionary income on items beyond necessities. Spending at grocery stores declined.

Retail sales excluding gasoline, automobiles and building materials—a figure watched closely by economists who use it as a truer gauge of consumer behavior—was up 0.5% in April, the Commerce Department said."

Summing Up

Why do government officials make things so hard for We the People?

If they'd just stop playing harmful political games in the energy area, we'd have more jobs, a stronger economic recovery and a more secure and safe nation.

Politics sucks.

Thanks. Bob.

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