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Retail Sales: Another Strong Month To End 2Q

July 16, 2019

Bottom Line: Retail sales rose more than expected in June. While there were slight downward revisions to May data, the 2nd Quarter overall proved solid. Online retailing once again led gains that for the most part were broadly distributed across sectors. Only electronics and appliances stood out as particularly weak. Building materials and garden supply sales rebounded after a very slow start to the quarter. The Q2 average for core sales ex gasoline stations and ex building materials is solidly above its Q1 level, suggesting that real consumer spending accelerated from its 1.3% Q1 pace. Overall, the consumer continues to grow steadily and at over 70% of GDP remains an important driver of growth even as business investment suffers amid trade uncertainty.

Retail Sales ROSE by 0.4% in June, compared with the market consensus for an increase of 0.2%.

The May estimate was revised lower from 0.55% to 0.41%. Retail sales are now 3.4% ABOVE their year ago level; just a year ago, the year over year growth rate was 6.0%. Spending at motor vehicle dealers climbed by 0.7%.

Core Retail Sales ROSE by 0.4%, compared with the market consensus for an increase 0.1%. The May estimate was revised lower from 0.50% to 0.36%. Core retail sales are now 3.3% ABOVE their year ago level; just a year ago, the year over year growth rate was 6.8%.

In June, gains at

  • nonstore retailers (+1.7%),
  • grocery stores (+0.5%),
  • building materials (+0.5%), and
  • health and personal care (+0.5%);

were partially offset by declines in

  • gasoline stations, primarily due to low gasoline prices (-2.8%), and
  • electronic and appliance stores (-0.3%).

Core Retail Sales ex Gasoline ROSE by 0.71% and are now 3.8% ABOVE their year ago level; just a year ago, the year over year growth rate was a solid 5.4% .

Article by Contingent Macro Advisors