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Economy in Brief

U.S. Retail Sales Excluding Autos Rise; Revisions Sharply Higher
by Tom Moeller March 12, 2009

Consumer spending firmed in the last two months following the notably soft performance during the second half of last year. During February, retail sales excluding autos & gasoline rose 0.5% after a 1.4% January increase which was nearly double the gain reported initially.

Overall, retail sales slipped 0.1% in February and that was not far off expectations for a 0.5% decline. However, coupled with a sharp upward revision to the January increase to 1.8% from 1.0%, it left sales for the start of 2009 on a much firmer footing. Consensus expectations had been for a decline of 0.5% in the February sales total. The retail sales data are available in Haver's USECON database.

The rise in total sales came despite another shortfall in motor vehicle purchases. They fell 4.3% and that mirrored the 4.7% m/m drop in unit sales of light vehicles which was reported last week. Gasoline service station sales offset some of that downside surprise. They rose 3.4% (-32.3% y/y) though the gain was boosted by the latest increases in gas prices.

Rebounds in sales were widely evident in this month's report. Sales at furniture, electronics & appliance stores added 0.9% to the upwardly revised 3.5% surge during January (6.1% y/y). Furniture store sales rose for the first month since last April and posted a 0.7% increase (-10.7% y/y). Sales of electronics & appliances added 1.2% (-1.4% y/y) to their 7.5% January upward spurt.

In the soft goods area, apparel store sales added 2.8% (-3.1% y/y) to the upwardly revised 4.9% January gain. At general merchandise stores, sales rose another 1.3% (2.3% y/y) on top of the unrevised 1.1% January increase.Last year apparel store sales fell 9.9% December-to-December and merchandise store sales slipped 0.2%.

Sales at nonstore (internet) retailers have not shared the picture of upside surprise. They rose just 0.3% last month (-0.6% y/y) after a 1.7% January increase which was downwardly revised. Moreover, the interest in dining out slackened and sales fell 0.2% (+2.8% y/y) after a 1.8% January increase.

Building materials sales continued down and posted a 0.2% (-10.3% y/y) decline. It was the seventh consecutive monthly drop.

Detecting Recessions in the Great Moderation: A Real-Time Analysis from the Federal Reserve Bank of Kansas City is available here.

  February January December Y/Y 2008 2007 2006
Retail Sales & Food Services (%) -0.1 1.8 -3.1 -8.6 -0.4 4.2 5.8
  Excluding Autos 0.7 1.6 -3.2 -5.0 2.8 4.6 6.8
    Less Gasoline 0.5 1.4 -1.8 -0.6 1.8 4.2 6.2
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