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Economy in Brief

U.S. Retail Sales Bounce Back M/M, but Forward Momentum Fades
by Tom Moeller  October 14, 2016

Total retail sales & spending at restaurants increased 0.6% during September (2.7% y/y) following a 0.2% August decline, revised from -0.3%. The increase matched expectations in the Action Economics Forecast Survey. Despite the bounce-back, the three-month change in sales fell to 2.1% (AR), its weakest since March.

Sales of motor vehicle & parts increased 1.1% (2.5% y/y) after a 0.3% fall. This compared to a 4.5% rise in unit vehicle purchases. Excluding autos, retail sales gained 0.5% (2.7% y/y) following two months of decline. In the retail control group, which comprises nonauto sales less gasoline, building materials & restaurants, sales nudged 0.1% higher (2.5% y/y) following two months of decline.

Gasoline service station sales rose 2.4% (-3.4% y/y) after a 1.4% drop. Building materials & garden equipment buying gained 1.4% (5.6% y/y) following a 0.8% fall.

Sporting goods, hobby, book & music store sales improved 1.4% (0.0% y/y) after two months of roughly 2.5% decline. Furniture & home furnishings store sales jumped 1.0% (2.7% y/y), though that followed two months of decline as well. Nonstore retailer sales improved 0.3% (10.6% y/y) after a 0.1% dip. Clothing store sales remained steady (0.7% y/y) after a 0.5% increase. To the downside, electronics & appliance outlet sales were off 0.9% (-3.8% y/y) following a 0.4% rise. General merchandisers posted a 0.4% drop (-2.5% y/y), the third consecutive monthly decline.

In the non-discretionary spending categories, food & beverage store sales improved 0.1% ( 1.6% y/y) after a 0.3% rise. Health & personal care store sales declined 0.5% (+5.4% y/y) following a 0.1% uptick.

Eating out was in vogue as food service & drinking establishment sales increased 0.8% (6.1% y/y) following a 0.7% gain.

U.S. Real Wage Growth: Fast Out of the Starting Blocks from the Federal Reserve Bank of New York is available here.

Retail Spending (%) Sep Aug Jul Sep Y/Y 2015 2014 2013
Total Retail Sales & Food Services 0.6 -0.2 0.1 2.7 2.3 4.1 3.8
  Excluding Autos 0.5 -0.2 -0.4 2.7 1.3 3.6 2.7
  Non-Auto Less Gasoline, Building Supplies & Food Services (Control Group) 0.1 -0.1 -0.2 2.5 3.3 4.0 2.9
Retail Sales 0.6 -0.3 0.1 2.2 1.6 3.9 3.8
  Motor Vehicle & Parts 1.1 -0.3 2.0 2.5 6.7 6.4 8.3
 Retail Less Autos 0.5 -0.3 -0.4 2.1 0.2 3.2 2.6
  Gasoline Stations 2.4 -1.4 -2.2 -3.4 -19.4 -2.4 -1.2
Food Service & Drinking Places Sales 0.8 0.7 -0.1 6.1 8.1 6.1 3.7
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