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Economy in Brief

U.S. Retail Sales Disappoint With Broad-Based Decline
by Tom Moeller  July 14, 2015

Overall retail sales including food services & drinking places during June declined 0.3% (2.9% y/y) following downwardly revised readings of 1.0% and no change during May and April, earlier reported as 1.2% and 0.2%. The June decline disappointed expectations for a 0.3% rise in the Action Economics Forecast Survey. Sales excluding autos eased 0.1% (+1.1% y/y) following a 0.8% May increase, revised from 1.0%. The gain missed expectations for a 0.6% rise. 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. They align with the consumer spending estimates in the GDP accounts. Sales in this grouping were off 0.1% (+3.3% y/y) after an unrevised 0.7% May rise.

Building materials & garden equipment led total sales lower with a 1.3% decline (+1.7% y/y), the third consecutive monthly shortfall. Fewer sales of light motor vehicles followed with a 1.1% decline (+9.9% y/y) after a 1.8% May rise. The decline compared to a 3.5% drop in unit sales of cars and light trucks.

In other discretionary spending categories, sales of furniture & home furnishings fell 1.6% (+6.5% y/y) after a 1.4% gain. Apparel store sales declined 1.5% (+2.5% y/y), reversing a 1.4% increase. Restaurant sales eased 0.2% (+7.8% y/y) and have been flat for two months. To the upside, electronics & appliance store sales jumped 1.0% (0.8% y/y) after two months of negligible improvement. Gasoline service station sales rose 0.8% with higher fuel prices (-16.2% y/y) after 3.7% increase. General merchandise sales gained 0.7% (0.9% y/y) and added to a 1.4% jump. Finally, sporting goods sales improved 0.1% (8.9% y/y) after a 0.6% rise.

In the nondiscretionary categories, health & personal care store sales rose 0.2% (3.0% y/y) following a 0.4% decrease. Food & beverage store sales remained roughly unchanged (2.7% y/y) after a 0.5% rise.

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

Retail Spending (%) Jun May Apr Jun Y/Y 2014 2013 2012
Total Retail Sales & Food Services -0.3 1.0 0.0 2.9 3.9 3.7 5.0
  Excluding Autos -0.1 0.8 -0.1 1.1 3.1 2.7 4.1
  Non-Auto Less Gasoline, Building Supplies & Food Services -0.1 0.7 -0.1 3.3 3.3 2.7 3.6
Retail Sales -0.3 1.1 -0.1 2.3 3.7 3.8 4.9
  Motor Vehicle & Parts -1.1 1.8 0.6 9.9 7.5 8.3 9.0
 Retail Less Autos -0.0 0.9 -0.3 -0.0 2.6 2.6 3.9
  Gasoline Stations 0.8 3.7 -0.9 -16.2 -2.7 -0.7 4.3
Food Service & Drinking Places Sales -0.2 0.2 1.1 7.8 6.2 3.4 5.9
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