CA: Retail Sales


Thu Dec 21 07:30:00 CST 2017

Consensus Actual Previous
Month over Month 0.5% 1.5% 0.1%
Year over Year 6.7% 6.2%

Highlights
October retail sales were up a monthly 1.5 percent beating expectations of an increase of 0.5 percent. On the year, sales were up 6.7 percent. Higher sales at new car dealers were the main contributor to the gain. Excluding sales at motor vehicle and parts dealers, retail sales increased 0.8 percent. Sales were up in 7 of 11 subsectors, representing 79 percent of retail trade. In volume terms, sales were up 1.4 percent.

Motor vehicle and parts dealers (3.3 percent) recorded the largest gain in dollar terms across all subsectors. The increase was largely attributable to higher sales at new car dealers (3.9 percent). Used car dealers and automotive parts, accessories & tire stores recorded higher sales. Other motor vehicle dealers were down for the third time in four months.

Sales rose at food & beverage stores, largely due to higher sales at beer, wine & liquor stores. Gains were also reported at supermarkets and other grocery stores and convenience stores. Receipts at specialty food stores declined for the first time in five months.

Definition
Retail sales measure the total receipts at stores that sell durable and nondurable goods. The headline data are reported in cash terms and disaggregated into eleven main subsectors. Aggregate volume figures are also provided.

Description
With consumer spending a large part of the economy, market players continually monitor spending patterns. Data are available both for total retail sales and those excluding autos and for 16 different store specializations. Since autos account for over 25 percent of retail sales, the sector can have a pronounced impact on overall sales given their volatility. Retail sales are used to estimate the goods portion of personal consumer expenditures in the quarterly GDP accounts, accounting for about 50 percent of the total.

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.

Retail sales not only give you a sense of the big picture, but also the trends among different types of retailers. Perhaps apparel sales are showing exceptional weakness but electronics sales are soaring. These trends from the retail sales data can help you spot specific investment opportunities, without having to wait for a company's quarterly or annual report.