IT: Retail Sales

Thu Jan 22 04:00:00 CST 2015

Consensus Actual Previous Revised
Month over Month 0.1% 0.1% 0.0%
Year over Year -2.3% -0.8% -1.0%

November retail sales saw their first monthly rise since April. However, the increase was a minimal 0.1 percent and following a string of falls from May through September (October was flat) did little to suggest that the trend decline in demand has finally come to an end. Unadjusted annual growth was minus 2.3 percent after a steeper revised 1.0 percent drop last time.

In fact non-food purchases were only unchanged at their October level and have failed to register any monthly increase for more than a year. Over the latest three months, the category recorded a 0.4 percent contraction. Consequently the monthly headline gain was wholly attributable to a 0.2 percent rise in food sales.

The November data leave overall sales nearly 5 percent below their March 2012 peak. Average purchases in October/November were just 0.1 percent short of their third quarter mean but it seems very unlikely that household spending provided much, if any, boost to fourth quarter real GDP growth.

Retail sales measure the total receipts at stores that sell durable and nondurable goods. The monthly change in the headline figure, which is reported in volume terms, is only disaggregated into food and non-food categories.

With consumer spending a large part of the economy, market players continually monitor spending patterns. Retail sales are a measure of consumer well-being. The pattern in consumer spending is often the foremost influence on stock and bond markets. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth.