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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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