CA: Retail Sales

Fri Oct 20 07:30:00 CDT 2017

Consensus Actual Previous
Month over Month 0.5% -0.3% 0.4%
Year over Year 6.9% 7.8%

August retail sales surprised and declined a monthly 0.3 percent after increasing 0.4 percent in July. Sales were down in 8 of 11 subsectors, representing 57 percent of retail trade. On the year, sales were up 6.9 percent. Lower monthly sales at food & beverage stores more than offset higher sales at gasoline stations and motor vehicle & parts dealers. Excluding the latter two subsectors, retail sales tumbled 1.3 percent. Following four consecutive monthly increases, sales at food & beverage stores declined in August. The decrease was largely attributable to lower sales at supermarkets and other grocery stores (-2.8 percent). Sales at specialty food stores were up for the third month in a row.

Sales were down at store types traditionally associated with housing purchases and home renovation. Sales at building material & garden equipment & supplies dealers and furniture & home furnishings stores declined for the second consecutive month. Gasoline stations posted their first sales gain in four months, largely reflecting higher prices at the pump. Motor vehicle & parts dealers' sales increased 0.7 percent, attributable to higher sales at new car dealers and, to a lesser extent, used car dealers. Sales at clothing & clothing accessories stores continued their upward trend in August.

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.