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.