June 14, 2017 – Retail Sales are the total amount of merchandise and related services sold to consumers. It is considered a sign of strength of U.S. Consumer spending, which accounts for roughly two-thirds of the economy. This indicator also provides insight into which areas of the retail space are experiencing strong sales, such as auto sales.
Retail sales decreased 0.3% in May from the previous month’s 0.4% growth. This dip in sales was below the consensus of a 0.1% gain. Year-over-year sales are up 3.8%. Retail sales less autos dropped 0.3% from the previous month when the consensus was 0.2% growth. Sales excluding auto and gas were unchanged in May, below the consensus of +0.3%. The control group had no growth as well, also below the consensus of +0.3%.
Retail sales rarely see a downward trend historically. While the trend for the past year is still up the rate of growth is noticeably slowing down. A big cause of this is gasoline station sales declined 2.4% and electronic & appliance store sales are down 2.8%. The majority of GDP is personal consumption so if sales do not bounce back in June then 2nd quarter GDP will be slimmer than expected. Nonstore retailers were still growing but at a meager 0.8% from April’s 10.2%.