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Economy in Brief

U.S. Retail Sales Post A Strong Increase; Nonauto Sales Surge Unexpectedly
by Tom Moeller  August 15, 2019

Consumer spending continues to exhibit strength. Total retail sales rose 0.7% (3.4% y/y) during July following a 0.3% June rise, revised from a 0.4%. May's increase was revised to 0.5% from 0.4%. A 0.3% July sales gain had been expected in the Action Economics Forecast Survey. Retail sales excluding motor vehicles and parts gained 1.0% (3.7% y/y). It was the largest increase since March. June's 0.3% rise was revised from 0.4% and May's 0.5% gain was revised from 0.4%. The latest reading compared to expectations for a 0.5% improvement.

Purchases of motor vehicle & parts held back last month's overall sales increase with a 0.6% decline (+2.3% y/y). It followed two months of modest increase. Last month's result compared to a 2.0% m/m easing in unit sales of motor vehicles.

A measure of the underlying pace of retail spending is nonauto sales growth excluding gasoline and building materials. These sales rose 1.0% (5.1% y/y) last month. That followed a 0.7% gain in June and a 0.8% May increase.

Sales exhibited broad-based improvement last month. Internet sales strengthened 2.8% (16.0% y/y) after a 1.9% rise. Electronics & appliance store sales increased 0.9% (-3.5% y/y) and reversed June's decline. Apparel & accessory store buying strengthened 0.8% (-2.4% y/y) after two minimal declines. General merchandise stores gained 0.6% (2.1% y/y) after a 0.1% rise. Furniture & home furnishing store sales improved 0.3% (0.0% y/y) following modest declines in the prior two months. Purchases at building materials & garden equipment stores rose 0.2% (-2.9% y/y), the same as in June. Showing weakness were purchases at sporting goods, hobby, book and music stores which fell 1.1%, the largest decline since December. The y/y decline moderated, however, to -0.5% versus an 11.8% y/y shortfall in December.

Strengthened by higher prices, gasoline service station sales rose 1.8% but held steady y/y.

Sales of nondiscretionary items were mixed last month. Food & beverage store sales increased 0.6% (3.4% y/y) after a 0.8% rise. Health & personal care product store sales slipped 0.2% (+4.3% y/y) after rising 0.6% in June.

Restaurant & drinking establishment sales increased 1.1% last month (3.8% y/y) after five months of strong gain.

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

Retail Spending (% chg) Jul Jun May Jul Y/Y 2018 2017 2016
Total Retail Sales & Food Services 0.7 0.3 0.5 3.4 4.9 4.2 3.0
  Excluding Autos 1.0 0.3 0.5 3.7 5.5 4.6 2.6
Retail Sales 0.6 0.3 0.4 3.4 4.7 4.0 2.7
  Motor Vehicle & Parts -0.6 0.3 0.4 2.3 2.6 2.8 4.4
 Retail Less Autos 1.0 0.3 0.4 3.7 5.3 4.4 2.1
  Gasoline Stations 1.8 -2.3 -0.2 0.0 12.9 8.2 -5.7
Food Service & Drinking Places Sales 1.1 0.7 1.1 3.8 6.4 5.5 5.5
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