COMMENTARY | COLUMNISTS | GEORGE CHAMBERLIN

Lower gas prices fueling spending elsewhere

A headline at MarketWatch.com on Wednesday said, "Retail sales slow toward end of summer." However, a closer look at the retail sales report for September from the Department of Commerce shows nothing could be further from the truth.

Last month sales rose by an anemic 0.1 percent to $447.7 billion. The report covers a variety of categories where consumers spend their money. The standout category was sales at gasoline stations, down 3.2 percent. The decline was not the result of a slowdown in spending. Rather, spending was impacted by lower prices.

A look at the other major categories showed normal increases in retail sales with some areas exceeding typical trends. For instance, auto sales were up 1.7 percent in September, continuing the strong growth throughout 2015.

The government report also showed clothing and sporting goods sales both up 0.9 percent, restaurant food and beverage sales were up 0.7 percent, and furniture sales added 0.6 percent.

A report from the JPMorgan Chase Institute finds the savings people are receiving at the pump is fueling spending in other areas, contrary to the belief that households were either banking the money or using it to pay down debt.

"This boost to consumer spending could be here to stay and even strengthen with time if gas prices remain low or continue to decrease as predicted. Notwithstanding the environmental and infrastructure impacts from increased gas consumption, lower gas prices are good news for the U.S. consumer," cites the report.

Just as analysts differ in how they interpret the retail sales report, they also have different approaches to the attitudes of households to their personal finances. According to the Bankrate October Financial Security Index, only 19 percent of Americans say they are feeling more comfortable about their savings.

Yet, when Gallup asked "Are you feeling about your financial situation these days, or not?," a full 50 percent said yes. And, 71 percent of those surveyed said they have "enough money" to buy the things they need.

Other surveys, like the Conference Board’s consumer confidence index, finds the confidence of households is based on the strength of the job market and rising home prices.

All of these report tend to paint a rosy picture heading into the holiday shopping season. A report from Deloitte says spending this year between November and January will reach a record $965 billion, suggesting the first trillion dollar holiday season could not be that far away.

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