Global| Sep 14 2012Can't Tell a Retail Sales Report by Its Headline
Summary
Retail sales seemed to surge in August even as July's gain was cut back to +0.6% from +0.8%. But reality is a bit grimmer. The retail sales gain ex motor vehicle sales stands up at 0.8% but then if you subtract gas station sales from [...]
Retail sales seemed to surge in August even as July's gain was cut back to +0.6% from +0.8%. But reality is a bit grimmer. The retail sales gain ex motor vehicle sales stands up at 0.8% but then if you subtract gas station sales from that, the net gain drops to a skinny 0.1%, not much in terms of sales volume.
Deflated by the CPI, real core retail sales (sales excluding gas station sales and food & beverage purchases) rose by 0.3%. On balance retail sales are up over three months and are up yr/yr but the real 3-month gain for core sales is only at a 1% pace and over 12-months it's at 3.4%.
A diffusion calculation finds only 29% of the more detailed durables and non durables categories saw sales accelerate in August compared to 94% accelerating in July. But over six months 64% of the categories are accelerating. Despite the headline in August the sales were not so solid although three of four main durables groups saw month to month increases. Furniture and electronics took a set-back on a sharp drop in electronics sales as furniture sales rose. The drop in electronics may have something to do with the new Apple phone offering, as i-phone sales typically fall off in the period before a new product announcement.
Obviously this is not a strong report and the Fed did not become more aggressive ahead of a strong retail sales report. But retail sales are not fading either. Durables spending was up by 1% mo/mo in August and that is a good sign. Over three months they are up at a moderate 2.2% annual rate but they are still up by a strong 7.4% over 12-months. Excluding gas station sales nondurable sales were flat in August but are up at a 2.4% nominal pace over three-months and by 3.9% Yr/Yr.
| Retail Sales Trends | ||||||
|---|---|---|---|---|---|---|
| Total Retail | Mo/Mo | Seasonally Adjusted Annual Rate | ||||
| Aug-12 | Jul-12 | 3Mo | 6Mo | Yr/Yr | YrAgo:Y/Y | |
| Retail&Food | 0.9% | 0.6% | 3.1% | 1.0% | 4.7% | 8.3% |
| Retail ex MV&Parts | 0.8% | 0.8% | 2.9% | 0.6% | 3.4% | 8.8% |
| Retail ex MV&Parts&Gas | 0.1% | 0.8% | 1.9% | 1.0% | 3.6% | 6.7% |
| Core | 0.4% | 0.7% | 2.4% | 1.3% | 5.4% | 6.6% |
| Real Core | 0.3% | 0.6% | 1.0% | -0.7% | 3.4% | 4.6% |
| Durables Retail | Mo/Mo | Seasonally Adjusted Annual Rate | ||||
| Aug-12 | Jul-12 | 3Mo | 6Mo | Yr/Yr | YrAgo:Y/Y | |
| Durables | 1.0% | 0.4% | 2.2% | 0.4% | 7.4% | 5.9% |
| Building Materials | 1.0% | 1.2% | 0.1% | -7.2% | 1.4% | 8.1% |
| Motor Vehicles & Parts | 1.3% | 0.1% | 4.0% | 3.1% | 10.7% | 6.2% |
| MV Dealers | 1.7% | -0.1% | 5.2% | 4.5% | 12.3% | 6.2% |
| Furniture, Electronics, etc | -0.5% | 0.9% | -2.7% | 0.0% | 2.7% | 1.6% |
| Nondurables Retail | Mo/Mo | Seasonally Adjusted Annual Rate | ||||
| Aug-12 | Jul-12 | 3Mo | 6Mo | Yr/Yr | YrAgo:Y/Y | |
| Nondurables | 0.8% | 0.7% | 3.5% | 1.3% | 3.6% | 9.3% |
| Nondurables ex Gas | 0.0% | 0.8% | 2.4% | 2.0% | 3.9% | 6.9% |
| Food Srvc & Drinking | 0.5% | 0.3% | 2.1% | 3.4% | 6.7% | 5.5% |
| Diffusion by Period | 29.4% | 94.1% | 64.7% | 11.8% | 23.5% | -- |
| Period Comparison for Diff | M/M | M/M | 3M/6M | 6M/12M | 12M/24M | -- |
Robert Brusca
AuthorMore in Author Profile »Robert A. Brusca is Chief Economist of Fact and Opinion Economics, a consulting firm he founded in Manhattan. He has been an economist on Wall Street for over 25 years. He has visited central banking and large institutional clients in over 30 countries in his career as an economist. Mr. Brusca was a Divisional Research Chief at the Federal Reserve Bank of NY (Chief of the International Financial markets Division), a Fed Watcher at Irving Trust and Chief Economist at Nikko Securities International. He is widely quoted and appears in various media. Mr. Brusca holds an MA and Ph.D. in economics from Michigan State University and a BA in Economics from the University of Michigan. His research pursues his strong interests in non aligned policy economics as well as international economics. FAO Economics’ research targets investors to assist them in making better investment decisions in stocks, bonds and in a variety of international assets. The company does not manage money and has no conflicts in giving economic advice.
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