Commerce Department Reports Drop in Consumer Spending
Washington D.C. The Commerce Department reported Friday that consumer spending dropped by 0.3% in September, the biggest setback since June 2004. It followed two months in which spending was flat and left activity for the quarter falling by the biggest amount in 28 years.
The weakness in consumer spending, which accounts for two-thirds of total economic activity, dragged the overall economy down in the third quarter.
The gross domestic product, the broadest measure of economic health, also fell by 0.3% in the third quarter, the strongest signal yet that the country has fallen into a recession.
In a separate report, the Labor Department on Friday said the wages and benefits of U.S. workers rose by a moderate 0.7% in the third quarter, the same increase as in the previous two quarters. The report provided more evidence that the weak economy is keeping a lid on wage pressures.
CVS Caremark 3Q earnings up 18.8%
WOONSOCKET, R.I. CVS Caremark announced that net revenues for the third quarter ended Sept. 27, increased $368.2 million to $20.9 billion, up from $20.5 billion during the third quarter ended Sept. 29, 2007.
Revenues in the retail drug store segment increased 5.3% to $11.5 billion in the third quarter, while same-store sales in the Company’s CVS/pharmacy division for the third quarter rose 3.7% over the prior year period.
Earnings from continuing operations for the third quarter increased 18.8% to $818.8 million compared with earnings from continuing operations of $689.5 million in the comparable 2007 period.
Tom Ryan, chairman, president and ceo of CVS Caremark said, “I’m pleased to report strong third quarter results, which were right in line with our expectations despite the uncertain economic environment.”
OfficeMax delays 3Q earnings release
NAPERVILLE, Ill. OfficeMax announced that it has delayed the release of its full 2008 third quarter earnings results so that the company can complete its analysis of the non-cash impairment charge caused by the bankruptcy of Lehman Brothers Holdings. OfficeMax continues to expect no adverse impact on its operations or liquidity as a result of the Lehman bankruptcy based on additional review completed since issuing its Sept. 19 press release.
Total sales in the third quarter of 2008 decreased approximately 9.5% to approximately $2.1 billion compared to the third quarter of 2007.
OfficeMax retail segment sales were approximately $1.05 billion in the third quarter of 2008, reflecting a same-store sales decrease of about 11.1% partly offset by sales from new stores. Retail same-store sales for the third quarter of 2008 declined across all major product categories due to weaker U.S. consumer and small business spending. Retail segment operating income for the third quarter of 2008 was approximately $29.1 million, or about 2.8% of sales, compared to operating income of $45.3 million, or 4.0% of sales, in the third quarter of 2007.