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Economy in Brief

U.S. Retail: Sales of Discretionary Items & Gasoline Lower
by Tom Moeller November 14, 2006

During October, US retail sales fell for the fourth month in the last five. Last month's 0.2% drop was, however, a bit less than Consensus expectations for a 0.4% decline. Going the other way, September's decline was doubled to -0.8%.

Falling gasoline prices accounted for much of the recent sales weakness. Last month gasoline station sales fell 6.0% (-12.5% y/y) after an 11.1% September drop that was deeper than initially reported. Gasoline prices fell 12.1% during October to an average $2.25 per gallon and this month have fallen another 1.3% to $2.22.

Sales by motor vehicle & parts dealers rose 0.6% (10.1% y/y) after an upwardly revised 0.7% September increase, though new unit vehicle sales fell 2.8% to 16.16M much of the difference reflected higher sales of automotive parts & accessories. Excluding autos, retail sales fell 0.4% following a deepened 1.2% decline during September.

October nonauto retail sales less gasoline rose 0.3% (5.0% y/y) following a very much downwardly revised 0.2% gain during September.

Sales of discretionary items lost steam. Sales at furniture, home furnishings & appliance stores fell 0.4% (+4.0% y/y) after a downwardly revised 0.1% September dip while sales at general merchandise stores fell 0.3% (+3.2% y/y). Also to the downside, for the seventh month this year, were building material sales which fell 0.3% (+1.8% y/y) after a 1.8% September drop that was initially reported as a 1.1% rise.

Rising were apparel store sales by 0.1% (7.6% y/y) after a 2.9% September spike and food service (restaurant) & drinking service sales by 0.3% (7.8% y/y).

Sales of nonstore retailers (internet & catalogue) fell for the third straight month, down 0.1% (8.6% y/y).

The Rise in Homeownership from the Federal Reserve Bank of San Francisco is available here.

  October September Y/Y 2005 2004 2003
Retail Sales & Food Services -0.2% -0.8% 4.5% 7.2% 6.2% 4.2%
  Excluding Autos -0.4% -1.2% 3.1% 8.2% 7.2% 4.7%
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