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Retail Sales Post First Monthly Increase in Six Months Despite “Clunkers” Stealing Thunder

Back-to-School, Sales Tax Holidays Boost Spending in August

Washington, September 15, 2009 – In spite of the “Cash for Clunkers” program taking money away from traditional retail, companies still managed month-to-month gains in August, leaving the industry to wonder how strong the back-to-school season could have been without the timing of the program. According to the National Retail Federation, retail industry sales (which exclude automobiles, gas stations, and restaurants) saw their first gain in six months, with sales rising 0.7 percent from July, though dipping 4.3 percent year-over-year

“Many Americans who traded in their vehicles have become saddled with monthly car payments, which reduces the amount of money they’re able to spend in other areas,” said Rosalind Wells. “As a result, it remains to be seen how the “Cash for Clunkers” program will impact traditional retail sales.”

August retail sales released today by the U.S. Commerce Department show total retail sales (which include non-general merchandise categories such as autos, gasoline stations and restaurants) increased a solid 2.7 percent seasonally adjusted from the previous month but declined 5.9 percent unadjusted year-over-year.

Sales tax holidays throughout the country, which fell a bit later this year than last, helped boost August retail sales on traditional school merchandise such as apparel and electronics. Sales at electronics and appliance stores increased 1.1 percent seasonally adjusted over July and decreased 10.7 percent unadjusted year-over-year. Clothing and clothing accessory stores sales increased 2.4 percent adjusted from the previous month and decreased 5.9 percent unadjusted from last year.

“Shoppers were a bit more comfortable digging into their wallets last month, and retailers are hopeful that we’ve turned a corner,” said Rosalind Wells, Chief Economist of NRF. “It is encouraging to see some momentum building as retailers anticipate the all-important holiday season.”

Health and personal care store sales also saw solid increases with sales increasing 0.4 seasonally adjusted from last month and 2.7 percent unadjusted over last August. Sporting goods, hobby, book and music stores sales increased 2.3 percent adjusted over last month and decreased 1.7 percent unadjusted year-over-year.

The National Retail Federation <> is the world’s largest retail trade association, with membership that comprises all retail formats and channels of distribution including department, specialty, discount, catalog, Internet, independent stores, chain restaurants, drug stores and grocery stores as well as the industry’s key trading partners of retail goods and services. NRF represents an industry with more than 1.6 million U.S. retail establishments, more than 24 million employees – about one in five American workers – and 2008 sales of $4.6 trillion. As the industry umbrella group, NRF also represents more than 100 state, national and international retail associations.