IT: Retail Sales

Wed Sep 06 03:00:00 CDT 2017

Consensus Actual Previous Revised
Month over Month 0.4% -0.2% 0.6%
Year over Year 0.0% 1.5% 1.3%

Retailers had a poor July. Excluding autos, sales fell 0.2 percent on the month after an unrevised 0.6 percent increase in June. Unadjusted annual growth was 0.0 percent, down from 1.3 percent last time.

Volumes largely followed suit with a 0.2 percent monthly drop that left them 0.4 percent lower on the year. The monthly decline reflected a 0.1 percent dip in purchases of food and a sharper 0.3 percent decrease in non-food, their third fall since March.

Despite the setback, overall volume sales in July were still 0.3 percent above their average level in the second quarter when they fell by an equivalent amount versus the January-March period. This at least holds out the promise of a better third quarter for retailers. Even so, the trend remains, at best, only flat indeed overall volume purchases in July were 0.9 percent below their level at the end of last year. Consumer confidence improved in August but total household spending is unlikely to provide much of a boost to third quarter real GDP growth.

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.