Consumer Spending - March 2009
Consumer Spending - March 2009Data and Analysis
National retail sales excluding autos posted a second consecutive monthly increase in February, up 0.8 percent from January. Core sales, which exclude autos, building supplies, and gasoline, were up 0.6 percent. Despite the increase, sales remain well below year-earlier levels.
According to retailers in the District, February sales did not align with the national increase; contacts continued to report disappointing sales and traffic. District sales tax collections through February continued to decrease. All District states' sales tax revenues were significantly below year-earlier levels.
Through December, District new vehicle registrations fell 37.5 percent from a year earlier while national registrations were down 34.8 percent. The decrease in District registrations continues to be driven by declining truck and SUV sales. Import vehicle dealers in the District reported that traffic and sales in the first half of March improved from January and February but were still down sharply from March 2008 when high gas prices boosted demand for their smaller cars. Sales of District-assembled vehicles for the first two months of 2009 were down sharply from comparable volumes in 2008. All companies, with the exception of Hyundai, posted double-digit declines. Hyundai's 3 percent gain in early 2009 was helped by promotional programs.
Tourism activity remained mixed in February and early March. Major airlines reportedly cut back on overseas flights as corporations trimmed business travel. Lower convention bookings and cancellations were noted in most parts of the District. Overall, the impact of the recession could be seen in tighter spending patterns and lower attendance at some events. For example, the ACC basketball tournament held in Atlanta in March sold 25,269 ticket packages for all 11 games compared to the 40,000 ticket packages that were sold when the Georgia Dome hosted the event in 2001.
Leisure travel bargains and discounting were prevalent throughout the District. Among the new promotions was a joint package from Universal Orlando and Royal Caribbean International. Reportedly, cruiselines were running at full capacity but were discounting heavily and offering incentives such as cabin upgrades, vouchers for onboard spending, and free onshore excursions. Although 2008 was a difficult year, cruiselines attracted 13 million passengers compared with 12.6 million in 2007. The Cruiseline International Association's members are introducing 14 new ships in 2009, adding 5 percent to existing capacity.
Parts of the District were more optimistic about tourism as local attractions seemed to be gaining appeal with state residents. New Orleans officials reported strong Mardi Gras attendance, with estimates varying between 750,000 and 850,000 visitors, an improvement over 2008. The city also reported a strong lineup of upcoming conventions. The Carnivale Celebration in Mobile reportedly also drew a record number of visitors in February. In Mississippi, a state official noted that the state hosted 22 million tourists in 2008, almost approaching pre–Hurricane Katrina levels of activity. Gaming revenue from Mississippi's Gulf Coast casinos increased 4.9 percent over last month but declined 8.4 percent on a year-over-year basis.
The U.S. Department of Commerce reported that the number of international visitors to the United States was a record 58 million in 2008, an increase of nearly 4 percent over 2007. Total arrivals in the fourth quarter declined 6 percent, however.