IT: Retail Sales

Wed Nov 25 04:00:00 CST 2015

Consensus Actual Previous Revised
Month over Month 0.3% -0.1% 0.3% 0.2%
Year over Year 1.5% 1.3%

Retail sales were surprisingly soft in September. Following a downwardly revised 0.2 percent gain in August nominal purchases dipped 0.1 percent, their first drop since June. Annual growth was 1.5 percent, up a couple of ticks from last time.

Volume sales were slightly weaker, falling 0.2 percent from mid-quarter for a yearly rise of 0.8 percent after a 1.0 percent gain in August.

September's setback was roughly equally divided between the food and non-food subsectors with the former down a real 0.3 percent on the month and the latter off 0.2 percent.

The latest data put volume sales in the third quarter 0.3 percent above their level in April-June when they advanced 0.2 percent. This suggests only a limited contribution from household demand to real GDP growth and helps to explain the disappointingly small 0.2 percent quarterly rise in total output last quarter. However, consumer confidence jumped in October so it may be that the key Christmas quarter will see a much needed rebound.

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.