IT: Retail Sales

Fri Jul 07 03:00:00 CDT 2017

Consensus Actual Previous Revised
Month over Month 0.3% -0.1% -0.1% -0.4%
Year over Year 1.8% 1.2% 0.8%

Retail sales (ex-autos) continued to struggle in May. Following a revised 0.4 percent monthly fall in April, volumes were down another 0.1 percent and so have still register any increase since January. A rise in unadjusted annual sales growth from 0.8 percent to 1.0 percent simply reflected favourable calendar effects.

Volumes were weaker still, posting a 0.3 percent decline versus April when they contracted 0.2 percent. Non-food demand was at least up 0.1 percent but, having fallen 0.6 percent last time, was also still 0.9 percent below its level at the start of the year. Sales of food slumped a monthly 1.1 percent.

Average total volume sales in April/May stand 0.4 percent below their mean level in the first quarter. An improbable 1.4 percent monthly jump will ne needed in June just to hold the second quarter flat. Accordingly, it looks like subdued household spending again weighed on what was probably another period of sluggish economic growth last quarter.

Retail sales measure the total receipts at stores that sell durable and nondurable goods. The headline data are expressed in nominal terms but volume statistics are also available. Autos are excluded. Only a very limited breakdown of subsector performance is available in the first report but much greater detail is provided in the following month's release.

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.