Imbalance Whac-a-mole

14 April 2009 By Martin Hutchinson

The 1.1% drop in March retail sales showed US consumers are filling their piggybanks. The savings rate was 4.2% in February; it should rise further in March and April when stimulus tax cuts kick in. Some economic imbalances are disappearing at last. Pity about the new ones.

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Retail and food services sales, announced on April 14, were $344bn in March, a decline of 1.1% from February (0.9% excluding automobiles) and of 9.4% from March 2008. The January to February percentage change was revised from minus 0.1% to plus 0.3%.

The US producer price index for finished goods, announced on April 14, fell 1.2% in March, mainly because of a 5.5% decline in energy prices. The core producer price index was flat in March, and rose at an annual rate of 2.6% in the first quarter and 3.8% over the year to March.

The US personal savings rate in February 2009 was 4.2%, up from 0.3% in February 2008.

The US deficit in goods and services trade was $26bn in February, down from a revised $36.2bn in January.

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