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Economy in Brief

U.S. Retail Spending Increases With Autos & Gasoline
by Tom Moeller August 13, 2010

As spending on motor vehicles changes, so too does spending on gasoline. That probably overstates the case, but last month an expected 0.4% increase in total retail sales was driven by a 1.6% increase in motor vehicles and a 2.3% gain in gasoline. Shifting back a month, the June sales drop of 0.3% was little revised and a function of lower spending on cars and gasoline.

A 1.6% gain in motor vehicles and parts purchases accompanied a reported 3.3% increase in unit vehicle sales last month. Moreover, a 2.3% increase in sales at gasoline service stations reflected the 4.6% m/m gain in gasoline prices reported in this morning's CPI. Excluding both auto and gasoline purchases, retail sales slipped 0.1% after a 0.2% June gain, revised from 0.1%. Last month's decline in retail sales again was paced by a 0.3% (+3.9% y/y) drop in sales at building materials & hardware stores after a 0.8% June drop.

The only real sales strength last month was in electronics & computers, -0.1% m/m but up 8.0% y/y. Internet & catalog vendors, up 0.2% m/m, increased by 12.6% y/y. Elsewhere discretionary spending  remained soft. A 0.7% drop (+3.8% y/y) in apparel store sales was the fourth consecutive monthly decline. General merchandise store sales slipped 0.2% (+2.4% y/y) last month and were down for the the third month in the last four. Furniture sales alone slipped 0.3% (+0.5% y/y). Food service sales ticked 0.2% higher (2.9% y/y) after three months of slight decline.

The retail sales data are available in Haver's USECON database.

The reaction of consumer spending and debt to tax rebates evidence from consumer credit data. This 2007 article from the Federal Reserve Bank of Chicago is available here.

July June May July Y/Y 2009 2008 2007
Total Retail Sales & Food Services (%) 0.4 -0.3 -1.0 5.5 -6.3 -1.0 3.3
     Motor Vehicle & Parts 1.6 -1.3 0.0 8.5 -12.0 -13.9 0.8
  Retail Sales excluding Autos 0.2 -0.1 -1.3 4.9 -5.1 2.3 3.9
     Gasoline 2.3 -2.0 -2.7 12.2 -24.7 9.9 6.8
  Non-Auto Sales Less Gasoline -0.1 0.2 -1.1 4.2 -1.9 1.2 3.5
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