U.S. Retail Sales Drop With Gasoline Prices, Vehicle & Most Other Sales

The Commerce Department reported this morning that retail sales dropped 2.8% last month after little revised declines during September and August. The decline exceeded Consensus expectations for a 2.0% drop. Lower vehicle sales, and lower prices for the fuel used to power them, accounted for most of last month's sales' decline. But there was notable weakness elsewhere. The retail sales data are contained in Haver's USECON database.

Motor vehicle & parts sales dropped 5.5% after the 4.8% plunge during September. As a result of these outsized declines, sales last month were roughly one quarter the year-ago level. The drop mirrors the 34.2% y/y drop reported last week in unit sales of motor vehicles.

Sales at gasoline service stations dropped 12.7% month-to-month (+0.4% y/y) as gasoline prices fell 17.6% m/m to an average of $3.05 per gallon. Another downward leg is in store for November retail sales given that gasoline prices already have fallen 27% from their October average to $2.22.

Retail sales less autos and gasoline are on a steep downward trend as well. These sales fell 0.5% which marked the third consecutive monthly decline. For nonauto sales alone, the 3.8% three-month decline is the largest in the series' history which extends back to the 1960s.

Sales at furniture and electronics & appliance stores fared the worst over the latest three months. They dropped 2.4% during October (-9.7% y/y) and were off 7.2% over the last three months alone. Furniture store sales fell 2.5% during October (-13.5% y/y), for their fourth consecutive monthly drop, and sales of electronics & appliance stores were off by 2.3% (-5.6% y/y). They're down by 6.6% over the last three months.

Apparel store sales hardly did much better, down 1.4% last month (-4.0% y/y) and they were off 5.7% during the last three. Sales at general merchandise stores have done little better. With their 0.4% decline last month (+2.3% y/y) they posted a 1.7% three-month drop.

And people aren't dining out much either. Restaurant & drinking place sales did rise 0.3% last month, but the y/y gain of 3.9% compares to 5.2% growth last year and 6.0%+ growth during the prior three years. They're curtailing spending even as they eat at home. Grocery store sales during the last three months rose just 0.4% after a 4.8% gain during all of last year. Finally, consumers restrained their on-line shopping. Sales of nonstore retailers (mostly electronic shopping) fell 1.8% last month +1.4% y/y) and sales were off 4.2% during the last three months.

Sales of building materials and garden equipment fell 0.4% (-1.5% y/y), their fourth down month in the last five.