Retail sales see an uptick as inflation recedes

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CLARKONOMICS: Isn’t it nice to have some better economic news for a change? Retail sales continued to outpace expectations in September while the latest numbers for October show that inflation is no longer as concerning as originally thought.

There were so many predictions that dollar would be worthless and inflation would be out of control. But the inflation genie seems to back in the bottle. That means going to the store and feeling your dollar buys less and less is not likely to be the picture moving forward.

Food inflation has reversed in many cases (or moderated in others) even though today a lot of people are not getting as much for their food dollar as they did a year ago.

Manufacturers and supermarkets are reluctant to cut prices now that there’s less pressure on them. That’s to be expected and it’s part of a natural cycle. Next what happens is the sales will start. I’m predicting you’ll start seeing more promotional activity on grocery items over the next 30 to 45 days.

The truth is any of a number of signs show the economy is improving. Will that momentum keep going? Well, there are some things that we can’t control, such as what the European economies are doing and what goes on with the euro. That could be a real wallop. We will just have to wait and see.

But the good news is there’s not as much bad news on the horizon!



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