IT: Retail Sales

Thu Jan 11 03:00:00 CST 2018

Consensus Actual Previous Revised
Month over Month 0.3% 1.1% -1.0%
Year over Year 1.4% -2.1% -2.3%

November retail sales (ex-auto) posted only their second rise in the last five months. However, a 1.1 percent monthly increase was well ahead of expectations and more than reversed an unrevised 1.0 percent drop in October. Unadjusted annual growth climbed from minus 2.3 percent to 1.4 percent.

However, volumes were not quite so buoyant and an otherwise respectable looking 0.8 percent monthly gain failed to offset the previous period's 1.0 percent decline. Within this, non-food advanced 0.7 percent after a 0.8 percent fall while food was up 1.0 percent following a 1.5 percent decrease.

The latest data put average overall real retail sales in October/November 0.3 percent below their mean level in the third quarter. Without any revisions, purchases will need to rise more than 0.5 percent on the month just to hold the fourth quarter flat. Following a minimal 0.1 percent quarterly increase in the third quarter, it looks very likely that the retail sector will again offer little, if any, support to fourth quarter economic 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.