CA: Retail Sales

August 19, 2016 07:30 CDT

Consensus Actual Previous
Month over Month 0.5% -0.1% 0.2%
Year over Year 2.7% %

Retail sales remained virtually flat in June. Retail sales edged down 0.1 percent but were up 2.7 percent on the year. Weaker sales at food & beverage stores and general merchandise stores offset higher sales at motor vehicle & parts dealers. Sales were down in 7 of 11 subsectors, representing 54 percent of retail trade.

Food & beverage stores (down 1.5 percent) recorded the largest decrease in dollar terms among subsectors in June. After advancing 6.4 percent in May, sales at beer, wine & liquor stores were down 4.7 percent, the largest monthly drop since June 2013. Receipts at supermarkets and other grocery stores fell 0.9 percent in June. Following three months of declines, sales at specialty food stores posted a 1.1 percent gain. Sales at convenience stores were up 0.3 percent. General merchandise stores were down for a second month, this time by 1.5 percent. Building material & garden equipment & supplies dealers retreated for the third time in four months. Sales were also down in clothing & clothing accessories stores.

Sales at motor vehicle & parts dealers were up 2.0 percent in June. The gain in this subsector was attributable to a 2.5 percent increase at new car dealers, where sales rose for the first time in five months. Automotive parts, accessories & tire stores and other motor vehicle dealers also recorded higher sales.

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.

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.