The U.S. economy is largely influenced by consumer spending, and this crucial segment hit some of its lowest figures in history during the Great Recession. However, several recent trends in retail indicate that the economy might be experiencing a complete rejuvenation, as small business owners are enjoying more fluid access to credit and higher sales performances.
Entrepreneurs in retail should consider applying for commercial loans and potentially purchasing property in the coming months, as rates are at historic lows and the economy continues to rebound. Thus far in 2013, the retail industry's performance has been impressive, with sales growing in the months January and February for the first time in years.
Consumer spending increased last month
The U.S. Department of Commerce recently announced that retail sales grew by a seasonally adjusted 0.1 percent last month, while this figure is even higher when excluding spending at gas stations. Since consumers spent more at retail establishments, rather than gasoline, an important segment of the nation's job creators have been more capable of expanding hiring efforts.
Though this 0.1 percent increase might appear minimal, it is far better than the common forecast of a 0.6 percent decline in the market that was offered by economists polled by MarketWatch. Sales at gasoline stations dropped amid falling prices of fuels, which further bolstered the increase in retail spending among American consumers.
The Commerce Department stated that gasoline station sales dropped at the largest rate since December 2008, falling 4.7 percent in April and marking the second straight month of lower spending on fuel. When these sales are excluded from the report, retail sales increased by 0.7 percent last month, which indicates Americans are beginning to divert savings to other products and services.
"Lower gasoline prices and the current low-inflation environment in general are helping to offset the impact of higher taxes and encourage households to raise spending in other areas," economist Andrew Grantham told MarketWatch.
The Commerce Department's report also revealed that earnings among online retailers grew significantly last month, rising 1.4 percent in April. MarketWatch noted that while March saw decreases in retail spending, February's report was upwardly revised to 1.1 percent increase, and combined with April to offset those losses two months ago.
Retailers hiring more
The latest data from the Bureau of Labor Statistics explained that retailers added 29,000 jobs in April, despite the lower sales in March. According to a report by SellingCrossing.com, hiring growth was healthy in the retail sector last month, while general merchandisers posted the most gains, adding 15,000 new jobs.
"When looking at hiring patterns, it's good to view trends over a broad perspective," Harrison Barnes, CEO of SellingCrossing.com, explained. "After March was a difficult month for the industry, many employers were afraid to commit to hiring while sales were down. But it's easy to blow a single month out of proportion. Overall, the industry is doing much better than it was even a year ago, and overall, employment is trending up in the retail sector."
The organization, which serves as a job site for retail and sales positions, noted that its systems have seen 37,000 openings consistently throughout the past several months.
Maximizing profits in retail
As hiring continues to improve, small business retailers need to make the most of the staff they are bringing aboard. The National Retail Federation recently recommended retailers focus upon training new employees with progressive learning portals, such as mobile learning technology, as this will maximize retention, bolster customer service and improve overall brand images.
Small business retailers in need of commercial loans should consider applying with Ocean Capital, a regional financial institution that offers a variety of lending programs.