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Big Miss: Retail Sales vs. Expectations

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    July 16, 2013

    Retail sales were up 0.4% in June compared to Bloomberg estimates of +0.8%. May retail sales were revised lower, to +0.5% from an originally reported +0.6%.
    The increase seems healthy enough until you dive into the details. Here are some retail sales comments from Bloomberg to help put things into perspective.

    • Restaurants and bars decreased 1.2 percent in June, the most since February 2008.
    • Sales dropped 2.2 percent at building materials outlets, the most since May 2012.
    • Purchases at department stores declined 1 percent in June.
    • Retail sales excluding autos and gasoline unexpectedly fell 0.1 percent.
    • Purchases rose 2.4 percent at furniture and home furnishing chains, the most since May 2012.
    • Automobile dealer sales rose 1.8 percent
    • Purchases excluding autos, gasoline and building materials, which render the figures used to calculate gross domestic product, rose 0.1 percent after a 0.2 percent increase in the previous month.

    That last bullet point explains why the next GDP number will likely be below stall speed.

    Yet economists still predict the US economy will expand at 2.3% in the third quarter. I will take the under (not that there is much meaning to GDP numbers in the first place).

    Census Bureau Report

    Let’s now take a look at some charts from the ADVANCE MONTHLY SALES FOR RETAIL AND FOOD SERVICES JUNE 2013 report by the Census Bureau.

    Retail Sales vs. Previous Months

    Retail Sales vs. Last Year

    Retail Sales Synopsis

     

     

    Trend Change or Another “Soft Patch”?

    Note the numbers for motor vehicles and parts dealers, and also for auto and other motor vehicle dealers vs the rest of retail sales.

    How sustainable are those numbers? I suggest not very. Next note furniture and home furnishing stores.

    Strength in those numbers reflects the strength in housing. How sustainable is housing with the huge rise in mortgage rates in the last month? Once again, I suggest not very.

    Yet, the consensus view is this somehow represents a bottoming action in the economy rather than a topping action. Time will tell which view is accurate.
    Read more at http://globaleconomicanalysis.blogspot.com/2013/07/big-miss-in-june-retail-sales-vs.html#7me5UC5MyrwewTJY.99

    Images: Flickr (licence attribution)

    About The Author

    Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.  Visit Sitka Pacific’s Account Management Page to learn more about wealth management and capital preservation strategies of Sitka Pacific.

    You are currently viewing my global economics blog which typically has commentary every day of the week. I am also a contributing “professor” on Minyanville, a community site focused on economic and financial education.  Every Thursday I do a podcast on HoweStreet and on an ad hoc basis contribute to many other sites.

    When not writing about stocks or the economy I spend a great deal of time on photography and in the garden. I have over 80 magazine and book cover credits. Some of my Wisconsin and gardening images can be seen at MichaelShedlock.com.

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