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Economy in Brief

U.S. Retail Sales Are Disappointing
by Tom Moeller  February 12, 2015

Overall retail sales including food services & drinking places declined 0.8% last month following an unrevised 0.9% fall in December. A 0.5% shortfall had been expected in the Action Economics Forecast Survey. Sales excluding autos slumped 0.9% (+1.6% y/y) for a second month. A 0.5% shortfall had been expected. During the last ten years, there has been a 58% correlation between the y/y change in retail sales and the change in disposable personal income. Sales in the retail control group, which exclude autos, gasoline, building materials and food services and align with the estimates in the GDP accounts, ticked 0.1% higher (4.3% y/y) after a 0.3% decline.

Lower gasoline prices continued to pull the value of retail sales lower with a 9.3% drop (-23.5% y/y), the eighth straight month of decline. Another retreat in auto sales also pulled the total down as they fell 0.5% (+10.0% y/y) following a 0.8% shortfall. These declines coincide with roughly 1.5% deteriorations in unit sales in each of the last two months. Sales of building materials recovered 0.6% (6.9% y/y) following a 0.7% drop.

Sales of nonstore retailers remained strong, posting a 0.5% increase (8.3% y/y). Purchases at electronics & appliance stores improved 0.3% (+3.6% y/y) after three straight months of decline. Sales at furniture & home furnishings outlets, however, were off 0.2% (+4.5% y/y), the fourth straight month of slight decline. Apparel store sales fell 0.8% (+2.7% y/y) after a 1.2% drop and general merchandise store sales ticked up 0.1% (1.8% y/y) after a 0.9% decline. Sporting goods, hobby, book & music store sales fell 2.6% (+8.0% y/y), off for the third straight month. Remaining strong were food service and drinking place sales which increased 0.8% (11.3% y/y) after a 1.4% rise.

In the nondiscretionary sales categories, health & personal care store sales grew 0.2% (6.6% y/y) after a 0.5% rise. Food & beverage store sales declined 0.3% (+3.1% y/y), the first decline in six months.

The retail sales figures are available in Haver's USECON database. The Action Economics figures are in the AS1REPNA database.

Retail Spending (%) Jan Dec Nov Jan Y/Y 2014 2013 2012
Total Retail Sales & Food Services -0.8 -0.9 0.4 3.3 4.0 4.2 5.1
  Excluding Autos -0.9 -0.9 0.2 1.7 3.0 3.0 4.0
  Non-Auto Less Gasoline, Building Supplies & Food Services 0.1 -0.3 0.6 4.3 3.3 3.3 3.6
Retail Sales -1.0 -1.1 0.4 2.4 3.8 4.3 5.0
  Motor Vehicle & Parts -0.5 -0.8 1.4 10.0 8.2 9.3 9.1
 Retail Less Autos -1.1 -1.2 0.1 0.3 2.5 3.0 4.0
  Gasoline Stations -9.3 -7.4 -3.2 -23.5 -3.0 -0.3 4.2
Food Service & Drinking Places Sales 0.8 1.4 0.7 11.3 5.8 3.0 5.9
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