Retail Sales Rule Down, Productivity Halts, Wages Up Most in Two Decades
Among the department stores, Federated which acquired May Department Stores last year, posted a hefty 7.7% gain in same-store sales. J.C. Penney had a same-store sales increase of 8.1%. Saks posted a robust 9.2% gain in same-store sales while Nordstrom had a 10.7% increase and Limited enjoyed a 9% gain in same-store sales. Gap reported a 7% drop in same-store sales.
Among the Teen retailers, Pacific Sunwear posted a 7.1% drop while American Eagle Outfitters reported a same-store sales increase of 8%.
U.S. auto sales rose 6.1% in October, though the gain was magnified by an unusually weak October in 2005. Ssales of cars and light trucks increased to 1,217,412, from 1,147,063 in October 2005. The sales total translated into an annual selling rate of 16.2 million cars, which is lower than the rate in eight of the past 12 months, according to Autodata.
The productivity of American workers slowed to a halt in the 3rd quarter, while wages were rising at the fastest clip in more than two decades -- a combination likely to raise inflation concerns at the Federal Reserve. The Labor Department reported Thursday that productivity, the amount of output per hour of work, showed no change in the July-September quarter, while labor costs rose by 3.8%. For the past year, wages and other labor costs are up by 5.3%, the fastest increase since 1982.
The preliminary seasonally-adjusted annual rates of productivity growth in the third quarter were: 0.1% in the business sector and 0.0% in the nonfarm business sector.
In manufacturing, productivity increases in the third quarter were: 5.9% in manufacturing, 8.6% in durable goods manufacturing, and 2.0% in nondurable goods manufacturing.
The flat productivity reading in the third quarter was the poorest showing since a 0.1 percent decline in productivity in the final three months of last year. Over the past four quarters, productivity has risen by 1.3%, the weakest showing since a 1.1% rise in early 1997.
The 3.8% rise in the cost of labor per unit of output followed even bigger gains of 9% in the first quarter and 5.4% in the second quarter, pushing labor costs up by 5.3% for the year ending in September, the biggest gain since late 1982.
New orders for manufactured goods in September, increased $8.6 billion or 2.1% to $411.2 billion, the U.S. Census Bureau reported. This is the biggest increase in six months, driven by a surge in orders for commercial aircraft. The orders for long-lasting durable goods were up 8.3%, offsetting a 4.6% drop in demand for food, gasoline and other nondurable products.
The increase in durable goods, which was revised up from an initial estimate last week of a 7.8 percent gain, reflecting a huge 189.7 percent surge in demand for commercial aircraft. Excluding airplanes and other transportation products, factory orders would have fallen by 2.4 percent. The drop in nondurable goods was attributed in part to lower prices for petroleum products.
New orders for manufactured durable goods in September, up four of the last five months, increased $17.5 billion or 8.3% to $228.1 billion.. This was at the highest level since the series began and followed a slight August increase. New orders for manufactured nondurable goods decreased $8.9 billion or 4.6 percent to $183.1 billion.
The Labor Department reported the number of newly laid off workers filing claims for unemployment benefits unexpectedly surged last week to the highest level in more than three months. A total of 327,000 people filed benefit claims for the week ending Oct. 28, up by 18,000 from the previous week.
The advance seasonally adjusted insured unemployment rate was 1.8% for the week ending Oct. 21, a decrease of 0.1% point from the prior week's rate of 1.9%.