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WHAT DOES IT ALL MEAN?

The sales figures for individual business classifications are a rich lode of information for those conducting retail equity analysis. Economists mine the whole report for precious insights. The Street, however, focuses on two numbers: the monthly percentage changes in total retail and food service sales and the change in total sales excluding motor vehicles and parts.

TOTAL RETAIL AND FOOD SERVICE SALES, NOMINAL AND REAL FIGURES

As noted earlier, the advance retail sales total creates a stir in the markets because of the insight it provides into consumer spending, one of the major forces driving the U.S. economy. Traders focus on the month-to-month percentage change in the total, and in the total “ex-auto” retail sales, rather than the monthly change in the dollar amount. The primary reason is that a $10 million monthly increase in 1993 isn’t the same as a $10 million increase in 2003. Analysis of monthly percentage changes eliminates this distortion. For the determination of longer trends, and a further refinement of month-to-month swings, analysts look at the year-over-year percentage change.

  

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