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April Retail Sales: The Spring Rebound Goes Missing

  • Written by Syndicated Publisher No Comments Comments
    May 14, 2015

    The Advance Retail Sales Report released this morning shows that sales in April came in flat month-over-month, a situation that was enabled by an upward March revision from 0.9% to 1.1%. Core Retail Sales (ex Autos) came in at a disappointing 0.1%, with the March number tweaked upward from 0.4% to 0.7%.

    Today’s numbers came in below the Investing.com forecast of 0.2% for Headline Sales and 0.5% for Core Sales.

    The mainstream expectation of spring bounce in sales after a severe winter hasn’t happened.

    The chart below is a log-scale snapshot of retail sales since the early 1990s. The two exponential regressions through the data help us to evaluate the long-term trend of this key economic indicator.

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    The year-over-year percent change provides another perspective on the historical trend. Here is the headline series.

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    Here is the year-over-year version of Core Retail Sales.

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    Retail Sales: “Control” Purchases

    The next two charts illustrate retail sales “Control” purchases, which is an even more “Core” view of retail sales. This series excludes Motor Vehicles & Parts, Gasoline, Building Materials as well as Food Services & Drinking Places.

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    Here is the same series year-over-year. Note the highlighted values at the start of the two recessions since the inception of this series in the early 1990s.

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    For a better sense of the reduced volatility of the “Control” series, here is a YoY overlay with the headline retail sales.

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    Bottom Line: The Advance Retail Sales for April were disappointing across the board. They suggest that the consumer economy is approaching stall speed.

    Images: Flickr (licence attribution)

    About The Author

    My original dshort.com website was launched in February 2005 using a domain name based on my real name, Doug Short. I’m a formerly retired first wave boomer with a Ph.D. in English from Duke. Now my website has been acquired byAdvisor Perspectives, where I have been appointed the Vice President of Research.

    My first career was a faculty position at North Carolina State University, where I achieved the rank of Full Professor in 1983. During the early ’80s I got hooked on academic uses of microcomputers for research and instruction. In 1983, I co-directed the Sixth International Conference on Computers and the Humanities. An IBM executive who attended the conference made me a job offer I couldn’t refuse.

    Thus began my new career as a Higher Education Consultant for IBM — an ambassador for Information Technology to major universities around the country. After 12 years with Big Blue, I grew tired of the constant travel and left for a series of IT management positions in the Research Triangle area of North Carolina. I concluded my IT career managing the group responsible for email and research databases at GlaxoSmithKline until my retirement in 2006.

    Contrary to what many visitors assume based on my last name, I’m not a bearish short seller. It’s true that some of my content has been a bit pessimistic in recent years. But I believe this is a result of economic realities and not a personal bias. For the record, my efforts to educate others about bear markets date from November 2007, as this Motley Fool article attests.
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