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Retail Sales: Downside Miss with Negative Revisions

September 15, 2017
Bottom Line: Total retail spending fell in August, sharply below expectations, with declines in motor vehicle-related sales. Core sales rose but were also less than expected as sales of electronics, building materials and clothing fell. Nonstore retailers saw sales fall just over 1%, one of the largest monthly declines for this sector in nearly two and a half years. Overall, core sales over the last 3 months are up 1.3% annualized, matching the pace of the last 6 months but sharply below the 3.6% pace of the last 12 months and 2016's pace of 3.2%. Core Sales ex-gasoline stations and ex-building materials during July and August were still modestly above their Q2 averages, suggesting that real consumer spending will continue to add just modestly to Q3 GDP.

Retail Sales FELL by 0.2% in August, compared with the market consensus for an increase of 0.3%. The July estimate was revised lower from 0.60% to 0.28%.

Retail sales are now 3.2% ABOVE their year ago level; just a year ago, the year over year growth rate was 2.4%. Spending at motor vehicle dealers fell by 1.6%.

Core Retail Sales ROSE by 0.2%, compared with the market consensus for an increase 0.3%. The July estimate was revised lower from 0.45% to 0.36%. Core retail sales are now 3.6% ABOVE their year ago level; just a year ago, the year over year growth rate was 2.0%.

  • In August, gains at gasoline stations, primarily due to high gasoline prices (+2.5%), grocery stores (+0.3%), miscellaneous retailers (+1.4%), general merchandise stores (+0.2%). were partially offset by declines in nonstore retailers (-1.1%), clothing stores (-1.0%), building materials (-0.5%), electronic and appliance stores (-0.7%.

Core Retail Sales ex Gasoline FELL by 0.09% and are now 3.3% ABOVE their year ago level; just a year ago, the year over year growth rate was a moderate 3.4%