May Retail Sales: Up 0.8% MoM, Better Than Forecast

by: Doug Short

By Jill Mislinski

The Census Bureau's Advance Retail Sales Report for May was released this morning. Headline sales came in at 0.8% month-over-month to one decimal and was above the consensus of 0.4%. Core sales (ex Autos) came in at 0.80% MoM (to two decimals). Revisions were made to reflect new seasonal factors, samples, and the results of a 2016 annual survey.

Here is the introduction from today's report:

Advance estimates of U.S. retail and food services sales for May 2018, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $502.0 billion, an increase of 0.8 percent (±0.5 percent) from the previous month, and 5.9 percent (±0.5 percent) above May 2017. Total sales for the March 2018 through May 2018 period were up 5.2 percent (±0.5 percent) from the same period a year ago. The March 2018 to April 2018 percent change was revised from up 0.2 percent (±0.7 percent)* to up 0.4 percent (±0.2 percent).

Retail trade sales were up 0.8 percent (±0.5 percent) from April 2018, and 6.0 percent (±0.5 percent) above last year. Gasoline Stations were up 17.7 percent (±1.6 percent) from May 2017, while Nonstore Retailers were up 9.1 percent (±1.4 percent) from last year. [view full report]

The chart below is a log-scale snapshot of retail sales since the early 1990s. The two exponential regressions through the data help us to evaluate the long-term trend of this key economic indicator.

The year-over-year percent change provides another perspective on the historical trend. Here is the headline series.

Core Sales

Here is the year-over-year version of Core Retail Sales.

"Control" Purchases

The next two charts illustrate retail sales "Control" purchases, which is an even more "Core" view of retail sales. This series excludes Motor Vehicles & Parts, Gasoline, Building Materials as well as Food Services & Drinking Places. The popular financial press typically ignores this series, but it a more consistent and reliable reading of the economy.

Here is the same series year over year. Note that the current level is above both highlighted values at the start of recessions since the inception of this series in the early 1990s.

For a better sense of the reduced volatility of the "Control" series, here is a YoY overlay with the headline retail sales.

Bottom Line: May sales showed an increase month over month and were better than forecasts. When FRED publishes their data, we'll take a closer look at Real Retail Sales.