July 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 0.2% in June from the previous month’s upwardly revised (+0.2%) 0.1% dip. This dip in sales was below the consensus of a 0.1% gain. Year-over-year sales are up 2.8%. Retail sales less autos dropped 0.2% from the previous month when the consensus was 0.2% growth. Sales excluding auto and gas were down 0.1% in June, below the consensus of no change. The control group had a 0.1% drop in growth as well, also below the consensus of no change.
Nonstore retailers and building materials were the largest sectors of growth at 0.4% and 0.5%, respectively. Restaurants were down for 3 out of the past 4 months at -0.6% in June. Gasoline has also been a drag on sales having declined 1.3%. This lack of consumer spending is not a promising sign for the second quarter GDP estimate coming out at the end of the month. While the past 2 months have declined, the trend over the past 12 months points to sales flattening. We will be keeping a close eye the future reports.