Retail Sales for April

While the headline number for today's retail sales report was inline with expectations (-0.2%), the ex-autos number came in stronger than forecast (+0.5% vs. +0.2%).

In order to see where the strength and weakness came from, we broke out today's report by category to see which groups have seen the biggest increases and decreases in their share of the total retail sales pie. As shown, over the last year the categories that have seen the largest increase in their share of retail sales are Gas Stations, Food and Beverage Stores, and General Merchandise. These groups are all purveyors of non-discretionary items, indicating that rising inflation is causing consumers to spend a larger share of their disposable income on necessities.

Groups that have seen the largest decrease in their share of total retail sales include Motor Vehicle and Parts, Building Materials, and Furniture.

While retail sales rose 2% on a year/year basis, after adjusting for inflation, sales actually declined by 1.9%. In fact, this month's decline marks the fifth straight monthly year/year decline. This is the longest streak of monthly declines in the last fifteen years.

click to enlarge

Comments

[drmalaka]

Looking at this data is meaningless without further thought like this article.

If we include energy, commodities and food in sales of course they are going to be stronger than expected. The truth is people still have money from their paychecks, the point is what they spend it on. Since more of that paycheck has to be spent on non discretionary goods that means less will be spent on retail goods like clothing and electronics.

WalMart says it all. Their sales are up tremendously. Do people think that this is not a zero sum game? If WalMart is selling more cheap goods then who is not selling more expensive goods?

There is no way around this, since Americans save zero dollars on average, if some prices go up and take up more of a household's expenses then something must go down. We will see weak sales from all those other retailers and also see smaller profit margins as they are forced to cut prices.

[GNeely]

I still find it puzzling that many understate the effect of companies shipping jobs overseas along with the decreases in wages being seen. It is unrealistic to expect that there will be no long term negative effect from this. When a job is lost which paid on average in the $18-$19 dollar per hour range and it is replaced by a job which pays an average of $11 per hour adjusted for inflation the result is obvious. Between the rising pressures of energy,groceries,credi... and education it is little wonder we are not able to save. Let us not forget also that for the last 30 years Americans have been expected to spend to keep the economy going at the pace it ran. Easy credit was encouraged by the Fed and financial education phased out of schools. ANd yes many here will say I do not know what I am talking about because I am not a "player". I am however one who lives it and knows a heck of a lot of others who do also.

[archman82011]

The simple fact is that retail sales were awful.

I actually heard some pathetic, bold faced lying woman (an analyst) on Bloomberg this afternoon saying that retail sales were good and that consumers were so financially strong. My God what a crock.
The majority of the retail sales number was for gasoline and to a lesser extent food. You really want to break it down, most of those purchases are not even made with cash, but on credit card. For the past year or so we have been hearing about how strong the consumer is and how energy has not affected their spending. That too is a lie. It is called "put it on credit card and hope you don't have to pay it back."

WMT, reporting very good numbers, only confirms what smart people know already. Consumers are leaving skid marks in front of their homes to get to WMT for anything that can be sold for a dollar.

That is not, nor had it ever been, a sign that consumers are flush with cash and more wealthy than they have ever been (according to Krudlow & Company).

The truth eventually becomes clear, these things just take time.