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Retail Sales: Rebound From Surprise Drop

October 14, 2016
Bottom Line: Total retail spending rebounded in September, consistent with expectations. Core retail sales increased and were led by gains at sporting/hobby stores and miscellaneous retailers, which would include in many cases sales of the new iPhone. While gasoline is a volatile component, both overall and core retail sales are still increasing on a year over year basis. However, the Q3 average for core sales ex gasoline stations and ex building materials is only slightly above its Q2 level, suggesting that real consumer spending decelerated from its 4.3% Q2 pace.

Retail Sales ROSE by 0.6% in September, compared with the market consensus for an increase of 0.6%. The August estimate was revised higher from -0.3% to -0.2%. Retail sales are now 2.7% ABOVE their year ago level; just a year ago, the year over year growth rate was 2.3%. Spending at motor vehicle dealers climbed by 1.1%.

Core Retail Sales ROSE by 0.5%, compared with the market consensus for an increase 0.5%. The August estimate was revised higher from -0.3% to -0.2%. Core retail sales are now 2.7% ABOVE their year ago level; just a year ago, the year over year growth rate was 1.1%.

In September, gains at gasoline stations, primarily due to higher gasoline prices (+2.4%), building materials (+1.4%), miscellaneous retailers (+1.8%), nonstore retailers (+0.3%). were partially offset by declines in general merchandise stores (-0.4%), health and personal care (-0.5%), electronic and appliance stores (-0.9%).

Core Retail Sales ex Gasoline ROSE by 0.3% and are now 3.4% ABOVE their year ago level; just a year ago, the year over year growth rate was a moderate 4.2%.