Yesterday, I made the modest suggestion that we think of Wal-Mart's (NYSE:WMT) surprisingly strong performance for June as a contrary indicator for consumer spending. In other words, I was saying people are likely to head to Wal-Mart more when they feel less able to afford to shop at Sears Holdings (NASDAQ:SHLD), Macy's (NYSE:M), or Target (NYSE:TGT) -- much less at Abercrombie & Fitch (NYSE:ANF) or Urban Outfitters (NASDAQ:URBN).
Today, the commerce department reported retail and food service sales numbers that might just support that indecent proposal. According to government bean counters, in June, retailers took in 0.9% less than they did in May. Maybe. That number's subject to a range of error amounting to 0.7% in either direction, but it's clearly a drop.
It may not be time to head for the bunker with the ammo and dried lentils, though, since the year-over-year numbers (without controlling for inflation) still show a 3.8% rise. But the trajectory looks lousy at this point, especially for those invested in companies that depend on discretionary income to boost sales and earnings.
If gas prices and the deflating housing bubble continue to pressure consumers, we may be in for a long, cool summer, not to mention winter and fall. Consider that before you decide to pay 50 times earnings for that hot teen retailer that happened to have a nice-looking June.
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At the time of publication, Seth Jayson had no positions in any company mentioned here. See his latest blog commentary here. View his stock holdings and Fool profile here. Fool rules are here.
