|Month over Month||0.1%||-0.3%||-0.1%||-0.2%|
|Year over Year||1.7%||0.3%||0.1%|
Retailers had another poor month in June as nominal sales fell 0.3 percent versus May when they declined a slightly steeper revised 0.2 percent. Unadjusted annual growth actually accelerated from 0.1 percent to 1.7 percent but this was due to extra shopping days in this year's report. Volume purchases were also 0.3 percent lower on the month.
Both food (minus 0.2 percent) and non-food (minus 0.3 percent) continued to struggle and the former has now declined in four of the last five months and the latter in three of the last four. However, solely thanks to a strong April (0.7 percent), overall sales for the second quarter as a whole were up 0.4 percent versus the January-March period when they rose 0.3 percent.
According to Istat, consumer confidence dropped quite sharply in July and failed to recover all of its lost ground in August. Buying intentions were similarly weaker over the period. As such, prospects for retail demand this quarter hardly look bright and any optimism prompted by April's bounce now looks even more premature.
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.
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