Retail Sales: Again Better Than Expected

Includes: PMR, RETL, RTH, XRT
by: Doug Short

The Advance Retail Sales Report released Thursday morning shows that sales in May came in at 0.6% month-over-month, a strong improvement over the 0.1% in April. Thursday's headline number came in above the consensus forecast of 0.3%. Excluding autos, Retail Sales were up 0.3%, up from last month's 0.0%.

The first chart below is a log-scale snapshot of retail sales since the early 1990s. I've included an inset to show the trend in this indicator over the past several months.

Here is a year-over-year snapshot of the same series. Here we can see that, despite the upward trend since the middle of last year, the YoY series has been slowing since its peak in June of 2011.

Here is the same chart excluding the volatile gasoline component.

Here is an overlay of the two since 2000, which gives us a better sense of the added YoY volatility that gasoline is responsible for in the overall retail sales number. For more on gasoline price volatility, see this weekly update.

After the May Consumer Price Index is released on Monday, we'll take a more detailed look at retail sales adjusted both for inflation and population growth.

Bottom Line: Although retail sales came in better than expected, the trend has been slowing month-over-month, and the year-over-year trend has been one of broad decline for the past 22 months.