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Retail Sales Doing Relatively Well

Summary

The headlines said retail was up in October.

Unfortunately the headlines are not inflation adjusted -even if inflation adjusted, there was an improvement.

But even looking back, inflation adjusted growth is about average seen since the end of the Great Recession.

Retail sales were up according to US Census headline data - but slightly above expectations. The unadjusted rolling average improved.

Things to consider when viewing this data:

  • it is not inflation adjusted - and inflation in this sector is now running over 1.5 %.
  • the three month rolling averages of the unadjusted data improved
  • our analysis says this month was about the same as upwardly adjusted last month.

The relationship between year-over-year growth in inflation adjusted retail sales and retail employment are now correlating.

Backward data revisions were upward.

Econintersect Analysis:

  • unadjusted sales rate of growth was unchanged month-over-month, and up4.5 % year-over-year.
  • unadjusted sales 3 month rolling year-over-year average growth accelerated 0.5 % month-over-month, up 4.3 % year-over-year.

  • unadjusted sales (but inflation adjusted) up 2.8 % year-over-year
  • this is an advance report. Please see caveats below showing variations between the advance report and the "final".
  • in the seasonally adjusted data - the major weakness was building materials, gasoline stations, and non-store retailers. There was significant strength in motor vehicles, furniture, foods and sporting goods..

U.S. Census Headlines:

  • seasonally adjusted sales up 0.2 % month-over-month, up 4.6 % year-over-year.
  • the market was expecting (from Bloomberg / Econoday):
seasonally adjusted Consensus Range Consensus Actual
Retail Sales - M/M change -0.5 % to 0.5 % +0.1 % +0.2 %
Retail Sales less autos - M/M change -0.1 % to 0.5 % +0.2 % +0.1 %
Less Autos & Gas - M/M Change 0.0 % to 0.5 % +0.3 % +0.3 %
Control Group - M/M change 0.3 % to 0.4 % +0.3 % +0.3 %

Year-over-Year Change - Unadjusted Retail Sales (blue line) and Inflation Adjusted Retail Sales (red line)

Retail sales per capita seems to be in a long term downtrend (but short term trends appear to be growing - see graph below).

Year-over-Year Change - Per Capita Seasonally Adjusted Retail Sales

Overall, the consumer is still not driving GDP growth.

Other Economic News this Week:

The Econintersect Economic Index for November 2017 returned to the range of normal growth after last month's brief dip. Still, the economic fundamentals are somewhat chaoic. Six-month employment growth forecast is now indicating slowing growth.

Bankruptcies this Week from bankruptcydata.comPacific Drilling, Real Industry (f/k/a Signature Group Holdings), Privately-held Velocity Holding

Please visit our landing page for a summary of all of our analysis this past week.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.