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Retail Sales: Autos Drag Headline; Core Still Moderate

June 14, 2017
Bottom Line: Weak auto sales dragged the headline retail sales number lower in May. Below expectations with only modest revisions to prior months, the three months ended in May grew at just 1.1% annualized. However, core sales ex gasoline remain up 3.4% annualized, still running at a faster pace than in 2016. Core Sales ex-gasoline stations and ex-building materials during April and May were modestly above their Q1 averages, suggesting that real consumer spending will continue to add positively to Q2 GDP. Overall, auto sales are slowing while online retail is continuing to run at a robust pace, keeping core sales ex-gasoline growing at a modest pace of just over 3%.

Retail Sales FELL by 0.3% in May, compared with the market consensus for no change. The April estimate was revised from 0.39% to 0.43%. Retail sales are now 3.8% ABOVE their year ago level; just a year ago, the year over year growth rate was 2.3%. Spending at motor vehicle dealers fell by 0.2%.

Core Retail Sales FELL by -0.3%, compared with the market consensus for an increase 0.1%. The April estimate was revised from 0.3% to 0.4%. Core retail sales are now 3.8% ABOVE their year ago level; just a year ago, the year over year growth rate was 2.5%.

  • In May, gains at nonstore retailers (+0.8%), clothing stores (+0.3%), grocery stores (+0.1%), furniture & home furnishing (+0.4%). were more than offset by declines in gasoline stations, primarily due to low gasoline prices (-2.4%), electronic and appliance stores (-2.8%), general merchandise stores (-0.3%), miscellaneous retailers (-1.3%.

Core Retail Sales ex Gasoline FELL by 0.02% and are now 3.6% ABOVE their year ago level; just a year ago, the year over year growth rate was a moderate 3.9%