Area consumers put the brakes on spending in the third quarter this year.
According to the latest retail sales report issued Monday by East Tennessee State University, retail sales slipped in the Tri-Cities region from July to September, falling 2.2 percent in Kingsport and 1.5 percent in Johnson City. Sales grew slightly in Bristol by 1.9 percent.
Adjusted for inflation, retail volume declined 3.9 percent in Kingsport, fell 3.2 percent in Johnson City, and grew only slightly by 0.2 percent in Bristol.
ETSU economist Steb Hipple noted that retail sales had been growing as the region’s job market improved.
"But in the last six months, area consumers have cut back in their spending patterns," said Hipple, noting that the sagging third-quarter sales followed weak retailing activity in the second quarter this year.
"Regional merchants are going to have to work very hard to push fourth quarter sales above the 2011 level," Hipple said.
In the Tri-Cities metropolitan region, third-quarter retail sales fell by 0.8 percent. Total retail sales and inflation adjusted sales were down in Sullivan, Scott and Washington County, Va., while sales and inflation adjusted sales were higher only in Hawkins and Unicoi counties. Sales were slightly higher in Washington County, Tenn., and Carter County, while inflation adjusted sales in those two counties were down.
Weakening retail activity was evident in other areas of East Tennessee. Sales fell 2.1 percent in the Knoxville area in the third quarter, and rose slightly by 0.3 percent in Chattanooga. Adjusted for inflation, sales volume fell 3.7 percent in Knoxville, and declined 1.4 percent in Chattanooga.
In Tennessee, retail sales increased by 2.0 percent in the third quarter, while inflation adjusted sales were only 0.3 percent above last year’s levels.
Retail sales across the country rose 4.1 percent in the quarter, marking the 12th consecutive quarter of retail growth. Adjusted for inflation, sales volume was up 2.4 percent in the nation.
Hipple said the business outlook is uncertain.
"The national economy is beginning to create jobs and increase output just as retail activity is softening. The November elections preserved the status quo, and now the January fiscal cliff is the major unknown in the national business picture. Analysts continue to project slow growth and a slow return to full employment and output levels," Hipple said.comments powered by Disqus