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Retail Sales: June Rebound, Trends Still Modestly Higher

July 15, 2022
Bottom Line:   Retail sales rose more than expected in June and there were modest upward revisions to the previous data. Gasoline station sales led the headline gains with prices notably higher at the pump. Auto sales were also solid, rebounding from a sharp decline in May. At the core level non-store (online) retail rebounded sharply and was annualizing at 9.37% in June, nearly in-line with the sector's year-on-year gains, suggesting almost no slowing in the trend of this largest core segment. Restaurants and bars saw solid gains with a continued modest acceleration in the trend for this sector that continues to rebound from Covid restrictions. Building and garden supply store sales were the most notable laggards, declining in June with three-month annualized sales declines of nearly 8% as the housing market has cooled. Overall, the consumer continues to grow spending modestly - while they are struggling with prices at the pump, high savings built-up from pandemic stimulus has allowed them to continue to spend on discretionary goods and services.
Retail Sales ROSE by 1.0% in June,  compared with the market consensus for an increase of 1.0%. Retail Sales for April were revised up from +0.704% to +0.711%, and for May were revised up from -0.267% to -0.128%. Retail sales are now 8.4% ABOVE their year ago level; just a year ago, the year-over-year growth rate was 19.6%. Spending at motor vehicle dealers climbed by 0.8%.
 
Core Retail Sales
ROSE by 1.0%, compared with the market consensus for an increase of 0.4%. The May estimate was revised lower from 0.60% to 0.56%. Core retail sales are now 10.6% ABOVE their year ago level; just a year ago, the year-over-year growth rate was 19.5%.
In June, gains at gasoline stations, primarily due to high gasoline prices (+3.6%), nonstore retailers (+2.2%), grocery stores (+0.4%), and miscellaneous retailers (+1.4%). were partially offset by declines in building materials (-0.9%), general merchandise stores (-0.2%), clothing stores (-0.4%), and health and personal care (-0.1%).

Core Retail Sales ex Gasoline
ROSE by 0.68% and are now 6.6% ABOVE their year ago level; just a year ago, the year over year growth rate was a remarkable17.8%.
Article by Contingent Macro