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Economy in Brief

U.S. Retail Sales Fell Again; Less Autos & Gasoline Sales Rose
by Tom Moeller December 12, 2008

This morning the Commerce Department reported that retail sales fell for the fifth consecutive month. The 1.8% November decline followed declines during October and September that were slightly greater than reported initially. Lower vehicle sales and lower gasoline prices accounted for last month's sales' decline. Elsewhere sales ticked higher, the first rise in the last four months. The latest shortfall in overall sales about matched Consensus expectations. The retail sales data are available in Haver's USECON database.

Motor vehicle & parts sales dropped 2.8% after declines of roughly 5.5% during both of the prior two months. As a result of these outsized declines, sales last month were down by one quarter from their year-ago level. The decline is less than the 36.7% y/y drop reported in unit sales of motor vehicles.

Lower prices pulled dollar sales at gasoline service stations down by 14.7% month-to-month and by nearly one-quarter from last year as gasoline prices fell 29.6% m/m to an average of $2.15 per gallon. Another downward leg is in store for December sales given that gasoline prices already have fallen 21% from their November average to $1.70.

Retail sales less autos and gasoline posted their first m/m increase since July. (It wasn't much of a gain.) They rose 0.3% after declines of roughly 0.7% during each of the prior three months.

Sales at furniture and electronics & appliance stores recouped all of their October drop with a 1.5% gain. However, that still left them down 7.8% y/y. Furniture store sales ticked up 0.2% (-10.9% y/y) after five monthly declines which ranged between 1% and 3% each month. Sales of electronics & appliance stores recovered 2.8% (-4.7% y/y) after a 2.0% October drop.

Apparel store sales ticked up 0.8% (-5.8% y/y) after three monthly declines which ranged between 0.7% and 4.1%. Doing somewhat better were sales at general merchandise stores which rose for the first month in the last five. The 1.2% gain raised them 2.6% from the year ago level.

Folks continued to pare their dining-out budgets. Restaurant & drinking place sales ticked up 0.2% last month, but the y/y gain of 2.8% compares to 5.2% growth last year and 6.0%+ growth during the prior three years. Steady near 10% y/y has been the growth in sales at drinking places while sales growth at both full-service and limited-service restaurants has fallen.

Building materials sales have fallen off a cliff with the downturn in housing. The 1.2% drop (-5.3% y/y) was the fifth decline in the last six.

Sales at nonstore (internet) retailers also have been hit hard. The 1.3% decline last month (-2.7% y/y) was the fifth in a row, a period during which sales have fallen 6.0%.

  November October September Y/Y 2007 2006 2005
Retail Sales & Food Services (%) -1.8 -2.9 -1.6 -7.4 4.1 5.8 6.4
  Excluding Autos -1.6 -2.4 -0.7 -2.9 4.5 6.8 7.5
    Less Gasoline 0.3 -0.7 -0.7 0.1 4.2 6.2 6.4
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