Retail Sales Remain Good But Deteriorating

Includes: RTH, SPY
by: William Trent, CFA

According to the Census Bureau advance monthly sales for retail and food services:

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for August, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $377.6 billion, an increase of 0.3 percent (±0.7%)* from the previous month and 3.7 percent (±0.8%) above August 2006. Total sales for the June through August 2007 period were up 3.8 percent (±0.5%) from the same period a year ago. The June to July 2007 percent change was revised from 0.3 percent (± 0.7%)* to 0.5 percent (± 0.2%).

The 3.7% year/year gain is an improvement from 3.2% in July. Still, looking at the longer-term trend it is too early to call an improvement. Furthermore, with CPI running 2.4% year/year the real retail growth is still pretty light.

I’m sticking to my previous characterization: Good but deteriorating.

Economic Data

Bad and Deteriorating Bad but Improving Good but Deteriorating Good and Improving
Existing Homes (June) Chicago Fed NAI (May) Consumer Confidence (June) Real Disposable Income
Employment (June) Durable Goods (June) Personal Spending (June) ISM Manufacturing (July)
New Home Sales (June) Construction Spending Retail sales (August 2007) ISM Services (June)
ATA Truck Tonnage (June) CPI (July 07) Leading Indicators (June)
GDP (Q2 Advance) Trade deficit (July 07)
PPI (July 07) Durable Goods (July)
Industrial Production (July 07)
Housing Starts (July 07)