December Retail Sales: Down 1.2% MoM

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by: Doug Short
Summary

The Census Bureau's Advance Retail Sales Report for December was released on Friday.

Headline sales came in at -1.2% month-over-month to one decimal and were worse than Investing.com's forecast of 0.1%.

Core sales (ex Autos) came in at -1.81% MoM (to two decimals).

By Jill Mislinski

The Census Bureau's Advance Retail Sales Report for December was released on Friday. Headline sales came in at -1.2% month-over-month to one decimal and were worse than Investing.com's forecast of 0.1%. Core sales (ex Autos) came in at -1.81% MoM (to two decimals). "Data collection and processing were delayed for this indicator release due to the lapse in federal funding from December 22, 2018 through January 25, 2019. Processing and data quality were monitored throughout and response rates were at or above normal levels for this release."

Here is the introduction from the report:

Advance estimates of U.S. retail and food services sales for December 2018, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $505.8 billion, a decrease of 1.2 percent (±0.5 percent) from the previous month, but 2.3 percent (±0.5 percent) above December 2017. Total sales for the 12 months of 2018 were up 5.0 percent (±1.4 percent) from 2017. Total sales for the October 2018 through December 2018 period were up 3.7 percent (±0.5 percent) from the same period a year ago. The October 2018 to November 2018 percent change was revised from up 0.2 percent (±0.5 percent)* to up 0.1 percent (±0.4 percent)*.

Retail trade sales were down 1.3 percent (±0.5 percent) from November 2018, but 2.1 percent (±0.5 percent) above last year. Clothing and clothing accessories stores were up 4.7 percent (±1.4 percent) from December 2017, while food services and drinking places were up 4.0 percent (±2.5 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.

Retail Sales Trends

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

Retail Sales YoY

Core Sales

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

Core Retail Sales YoY

"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 is a more consistent and reliable reading of the economy.

Control Sales Trends

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.

Control Sales YoY

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

Headline and Control YoY

Bottom Line: December sales showed a decrease month over month and were worse than forecasts. When FRED publishes its data, we'll take a closer look at Real Retail Sales.

Original post

Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.