Retail Numbers: Worse Than They Look?

The retail sales numbers reported yesterday by the US Census Bureau leads us to the false belief that the numbers are actually quite good, since the 0.2% increase in March numbers was slightly better than the 0.1% increase analysts had predicted. A deeper dive analysis reveals that the situation is actually not as glamorous as many publications had reported:

1. The reported numbers reflected the large gain in sales at gasoline service stations. Sales in most categories were quite bleak. For example, sales at general merchandise stores fell by 0.6% while specialty stores were down 0.5%.
2. Although the month-to-month change looks good, a view of the Q1 change versus previous years shows a significant slowdown in growth since 2007. (See chart below; click to enlarge.)