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Economy in Brief

U.S. Retail Sales Gain Moderates
by Tom Moeller  July 16, 2018

Consumers continued spending last month, but at a moderated pace. Total retail sales increased 0.5% during June following a 1.3% May increase, revised from 0.8%. The 6.6% y/y increase was, however, the strongest since February 2012. The latest gain matched expectations in the Action Economics Forecast Survey. Excluding motor vehicles and parts, retail sales rose 0.4% last month after a 1.4% increase, revised from 0.9%. The gain also matched expectations. A measure of the underlying pace of retail spending is nonauto sales growth excluding gasoline and building materials. These sales held steady last month (+4.9% y/y) after a 0.8% rise.

Sales patterns amongst categories were mixed last month. A 1.3% increase (10.2% y/y) in sales of nonstore retailers led the growth in overall retail sales as it followed a 0.4% rise. Building materials & garden equipment store sales rose 0.8% (6.2% y/y) after a 2.5% jump. Sales at furniture & home furnishings stores improved 0.6% (4.8% y/y) following 1.4% decline.

Weakening during June by 2.5% (+4.0% y/y) were clothing & accessory store sales as they reversed the 2.9% May rise. Electronics & appliance store sales eased 0.4% (+2.1% y/y) which also reversed the prior month's gain. General merchandise store sales fell 0.8% (+2.3% y/y) after a 1.2% strengthening. Sporting goods, hobby, book & music stores sales were off 3.2% (-4.7% y/y) after a 0.9% decline.

Despite a sharp decline in pump prices, gasoline station sales improved 1.0% (21.6% y/y) after a 3.0% rise.

Sales of nondiscretionary items also were mixed last month. Health & personal care product store sales increased 2.2% (6.7% y/y) after three consecutive months of strong increase. Food & beverages store sales, however, eased 0.3% (+3.9% y/y) after four months of modest gain.

Eating out remained in vogue last month as restaurant & drinking establishment sales gained 1.5% (8.0% y/y) following a 2.6% increase.

The retail sales data can be found in Haver's USECON database. The Action Economics forecast is in the AS1REPNA database.

Retail Spending (% chg) Jun May Apr Jun Y/Y 2017 2016 2015
Total Retail Sales & Food Services 0.5 1.3 0.3 6.6 4.3 3.1 2.6
  Excluding Autos 0.4 1.4 0.4 7.1 4.3 2.7 1.4
  Non-Auto Less Gasoline 0.3 1.3 0.4 5.5 3.7 3.6 4.2
Retail Sales 0.3 1.1 0.4 6.4 4.5 2.8 1.9
  Motor Vehicle & Parts 0.9 0.8 0.2 4.5 4.3 4.6 7.2
 Retail Less Autos 0.2 1.2 0.5 7.0 4.5 2.2 0.4
  Gasoline Stations 1.0 3.0 0.4 21.6 8.8 -5.7 -17.6
Food Service & Drinking Places Sales 1.5 2.6 -0.2 8.0 2.7 5.6 8.2
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