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Economy in Brief

U.S. Retail Sales Rebound Following Three Months of Decline
by Tom Moeller  April 14, 2015

The weather improved last month so shoppers exercised their wallets. Overall retail sales including food services & drinking places during March increased 0.9% (1.3% y/y) following three straight months of decline. A 1.0% increase had been expected in the Action Economics Forecast Survey. Sales excluding autos gained 0.4% (+0.8% y/y) after little change in February, revised from -0.1%. A 0.6% increase had been expected. During the last ten years, there has been a 92% correlation between the y/y change in retail sales and the change in real GDP. Sales in the retail control group exclude autos, gasoline, building materials & food services align with the consumer spending estimates in the GDP accounts. Sales in this grouping increased 0.3% last month (2.4% y/y) after two months of 0.2% decline.

A 2.7% increase in auto sales (5.2% y/y) pulled overall retail spending higher last month as it rebounded from a 2.1% drop. The increase coincides with a 5.6% improvement in unit vehicle sales. Sales of building materials rebounded 2.1% (6.3% y/y) following a 1.8% decline.

Purchases at furniture & home furnishings outlets increased 1.4% (3.8% y/y) after falling in three of the prior four months. Apparel store sales gained 1.2% (2.7% y/y) after three months of weakness. Sales at food service & drinking places rose 0.7% (7.7% y/y) following a 0.2% gain, revised from a 0.6% decline. General merchandise store sales improved 0.6% (0.3% y/y), but that wasn't enough to recover the prior month's 1.9% shortfall. Sporting goods, hobby, book & music store sales increased 0.2% (5.1% y/y) after a 2.6% gain. To the downside, sales at electronics & appliance stores were off 0.5% (-1.9% y/y), off for the fifth month in the last six. Gasoline service station sales fell 0.6% (-22.0% y/y) following a 2.3% rise.

In the nondiscretionary sales categories, health & personal care store sales increased 0.3% (4.9% y/y) following two months of slight decline. Food & beverage store sales moved 0.5% lower (+2.5% y/y), the second decline in three months.

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

Retail Spending (%) Mar Feb Jan Mar Y/Y 2014 2013 2012
Total Retail Sales & Food Services 0.9 -0.5 -0.8 1.3 4.0 4.2 5.1
  Excluding Autos 0.4 -0.0 -1.2 0.3 3.0 3.0 4.2
  Non-Auto Less Gasoline, Building Supplies & Food Services 0.3 -0.2 -0.2 2.4 3.3 3.3 3.6
Retail Sales 0.9 -0.5 -0.9 0.5 3.8 4.3 5.0
  Motor Vehicle & Parts 2.7 -2.1 0.7 5.2 8.2 9.3 9.1
 Retail Less Autos 0.3 -0.1 -1.4 -0.9 2.6 3.0 4.0
  Gasoline Stations -0.6 2.3 -10.1 -22.0 -2.7 -0.3 4.2
Food Service & Drinking Places Sales 0.7 0.2 -0.1 7.7 5.9 3.0 5.9
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