More of the Same in Week 3
The third week of February has continued on the month's trend with independent retailers reporting their same store sales were down 1.74 percent compared to the same period in 2017. Customer counts were down 1.3 percent.
Earlier this week, new Federal Reserve chairman Jerome Powell made his first public statements to Congress, in which he had an overall positive message. Despite shakiness in the stock market recently, Chairman Powell sees that the economy is growing at a good pace. The Trump administration wants to see three percent growth, which Chairman Powell noted the economy roughly achieved in the second half of 2017.
Chairman Powell indicated that the Fed will continue its plan to raise federal interest rates from their historically low levels at a steady pace, but if the economy continues to strengthen, there could be a slight quickening in increases.
The fear from economists is that rising interest rates will lead to high inflation, but with inflation, especially in the Food at Home index, at stubbornly low levels, a controlled bump in food at home prices would be a welcome sight to retailers, who've been struggling with the items they stock being worth barely more or sometimes less than they did the year before.
If the economy continues its steady growth, hopefully slightly higher interest rates and an increase in food at home prices will begin translating to increased sales.