IT: Retail Sales

Tue Nov 07 03:00:00 CST 2017

Consensus Actual Previous Revised
Month over Month 0.2% 0.9% -0.3% -0.2%
Year over Year 3.4% -0.5% -0.1%

Retail sales were unexpectedly buoyant in September. Excluding autos, purchases jumped 0.9 percent on the month, their first increase since June and their strongest gain since January. Unadjusted annual growth climbed from minus 0.1 percent to 3.4 percent.

Volumes moved in line as real sales also expanded 0.9 percent versus August to stand 2.7 percent higher than in September 2016. This was only their second monthly rise in half a year and within this, food purchases increased 0.8 percent while non-food gained 0.9 percent.

The latest figures put overall third quarter volumes just 0.1 percent firmer than in the second quarter when they declined 0.2 percent versus January-March. This points to an insignificant contribution from the sector to third quarter real GDP growth. Consumer confidence has improved in recent months but it remains to be seen if this will equate with a meaningful pick-up in household spending.

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.