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Retail Sales: Slower But Not Yet Cause For Alarm

December 12, 2019

Bottom Line: Core retail sales rose less than expected in November, as the late Thanksgiving holiday shortened the typical holiday shopping window, making seasonal adjustments difficult. There were also positive revisions to October data. Still, the last three months saw a pronounced slowdown in consumption with core sale averaging growth of just 0.8% annualized, well below the six-month pace of 3.2%. While that is a concerning trend, it is too early to suggest it is a signal of consumer weakness in the 4th Quarter given the seasonal volatility. That said, this report puts a heavy burden on December sales to bring the trend rate back up.

Retail Sales ROSE by 0.2% in November, compared with the market consensus for an increase of 0.5%. The October estimate was revised from 0.26% to 0.45%. Retail sales are now 3.3% ABOVE their year ago level; just a year ago, the year over year growth rate was 4.1%. Spending at motor vehicle dealers climbed by 0.5%.

Core Retail Sales ROSE by 0.1%, compared with the market consensus for an increase 0.4%. The October estimate was revised from 0.20% to 0.31%. Core retail sales are now 3.0% ABOVE their year ago level; just a year ago, the year over year growth rate was 4.7%.

In November, gains were at nonstore retailers (+0.8%),

  • gasoline stations, primarily due to high gasoline prices (+0.7%),
  • grocery stores (+0.3%), and
  • general merchandise stores (+0.1%).
These were partially offset by declines in health and personal care (-1.1%),
  • clothing stores (-0.6%),
  • miscellaneous retailers (-0.4%),
  • sporting goods, hobbies, etc. (-0.5%).
Core Retail Sales ex Gasoline ROSE by 0.05% and are now 3.3% ABOVE their year ago level; just a year ago, the year over year growth rate was a moderate 4.3%.

Article by Contingent Macro Advisors