| Consensus | Actual | Previous | |
|---|---|---|---|
| Month over Month | 0.1% | 0.7% | 0.2% |
| Year over Year | 3.0% | 3.2% |
Highlights
Retail sales were surprisingly firm in May. A 0.7 percent monthly rise was well above the market consensus and the largest since January. However, following an unrevised 0.2 percent increase in April, negative base effects still saw unadjusted annual growth drop from 3.2 percent to 3.0 percent, a 7-month low.
More optimistically, volumes posted their first monthly advance since the start of the year. A 0.2 percent rise followed three successive falls and lifted yearly growth from minus 5.0 percent to minus 4.7 percent. On the month, food purchases were down 0.5 percent but non-food climbed 0.7 percent.
Despite May's gain, average total volume sales in April/May were still 0.6 percent below their mean level in the first quarter. Ignoring any revisions, June will need a monthly increase of at least 1.6 percent to prevent the sector from subtracting from second quarter GDP growth. That said, at 25 and 15 respectively, the Italian ECDI and ECDI-P show that in general, economic activity is performing somewhat better than expected.
More optimistically, volumes posted their first monthly advance since the start of the year. A 0.2 percent rise followed three successive falls and lifted yearly growth from minus 5.0 percent to minus 4.7 percent. On the month, food purchases were down 0.5 percent but non-food climbed 0.7 percent.
Despite May's gain, average total volume sales in April/May were still 0.6 percent below their mean level in the first quarter. Ignoring any revisions, June will need a monthly increase of at least 1.6 percent to prevent the sector from subtracting from second quarter GDP growth. That said, at 25 and 15 respectively, the Italian ECDI and ECDI-P show that in general, economic activity is performing somewhat better than expected.
Market Consensus Before Announcement
Sales are seen rising just 0.1 percent on the month after a 0.2 percent gain in April.
Definition
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. The Italian National Institute of Statistics (Istat) is the main producer of official statistics in Italy.
Description
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.
