| Consensus | Actual | Previous | |
|---|---|---|---|
| Month over Month | 0.2% | 0.4% | -0.2% |
| Year over Year | 2.7% | 3.6% |
Highlights
Retail sales rose 0.4 percent on the month in July, beating the market consensus and more than reversing June's unrevised 0.2 percent decline. However, negative base effects saw unadjusted annual growth slow to 2.7 percent, down from 3.6 percent last time.
With rising prices supporting nominal sales, volumes were again much weaker. A 0.2 percent monthly drop was their fifth fall since January and reflected a 0.4 percent decrease in non-food. Sales of food were flat, the first month that they have not contracted since April. On the year, overall unadjusted sales decreased 4.5 percent having fallen 3.1 percent in June.
Today's update puts total volume sales 0.5 percent below their average level in the second quarter and so warns of a possible fifth successive hit from the sector to quarterly GDP growth. The Italian ECDI now stands at 7 and the ECDI-P at minus 1, both readings being close enough to zero to indicate economic activity in general behaving much as expected.
With rising prices supporting nominal sales, volumes were again much weaker. A 0.2 percent monthly drop was their fifth fall since January and reflected a 0.4 percent decrease in non-food. Sales of food were flat, the first month that they have not contracted since April. On the year, overall unadjusted sales decreased 4.5 percent having fallen 3.1 percent in June.
Today's update puts total volume sales 0.5 percent below their average level in the second quarter and so warns of a possible fifth successive hit from the sector to quarterly GDP growth. The Italian ECDI now stands at 7 and the ECDI-P at minus 1, both readings being close enough to zero to indicate economic activity in general behaving much as expected.
Market Consensus Before Announcement
Sales are expected to rise 0.2 percent on the month after a 0.2 percent fall in June.
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.
