Retail sales jumped 1.3% in April following yesterday’s miserable stew of retail sales reports.
Last evening ZeroHedge sarcastically tweeted
He was correct.
For the second irony, the report was so good, that US treasuries rallied.
The Bloomberg Econoday consensus estimate for retail sales was 0.9%. Sales jumped 1.3%.
The consumer snapped back to life in April, driving retail sales 1.3 percent higher to beat Econoday’s consensus by 4 tenths and the high estimate by 1 tenth. Gains are spread throughout most of the report.
Autos are the key component, up a sharp 3.2 percent to reverse the prior month’s decline. Excluding autos, retail sales rose 0.8 percent.
Sales at gasoline stations, boosted by higher prices, also contributed strongly, up 2.2 percent in the month. But even excluding both autos and gasoline, sales still rose 0.6 percent for the third straight gain, two of which are very strong.
Apparel was a big contributor in April along with nonstore retailers and with restaurants also showing a gain. The only component in contraction was building materials & garden equipment which hints at a little cooling for what has been very solid residential investment.
Year-on-year rates all improved though total sales remain very soft at 3.0 percent. Auto sales, pulled down by tough comparisons with very strong sales this time last year, are up only 3.1 percent on the year. But other components show strength with the ex-auto ex-gas rate at a healthy 4.4 percent for a 5 tenths gain in the month.
Today’s report points to a solid start for the second quarter and gives some life to the possibility of a June FOMC rate hike.
Retail Sales Charts
Charts from Census Department Advance Monthly Sales.
Some of these numbers look peculiar so let’s dive in further.
Department stores are not doing well to say the least. Non-store retailers are up a big 10.2% from a year ago, but that base is on a small number.
Here’s a chart I posted yesterday in Retail Department Store Carnage: Amazon to Blame? Mish 12-Point Summation.
Apparel Market Share
A 10% growth in something weighted 6% cannot fully explain a decline in sales at components that total 41.6% of the retailers.
Adding to the surreal nature of of today’s retail sales numbers, US treasuries rallied.
Every month the Bloomberg Econoday writers keep hoping, praying, and discussing rate hikes.
This is what the market thinks.
A quick check shows the market does not expect a hike until December.
That chart is as of yesterday’s close. Yield on the long end are down a couple ticks today.
The market does not see hikes are imminent, and neither do I.
Mike “Mish” Shedlock
Jon Sellers said:
More expensive gas and cars make the economy look better but actually reduce folks standard of living.
I actually expected the Fed to raise rates last time just to show some back bone and have room to cut later. Didn’t happen.
My repeated calls to Janet Yellen continue to go unreturned. Imagine that.
Indeed, if price inflation (e.g. gasoline) is being touted as “economic growth,” then all these headlines are bogus and more relevant as examples of economic statistics functioning as Central Planning propaganda. If the FED measures “economic growth success” as “price inflation,” then the FED is indeed a dysfunctional Central Planning Politburo.
Perhaps it would be more indicative of economic growth or non-growth to measure units (e.g. gallons of gasoline sold or consumed). That way, price inflation would not falsely be touted as economic growth. Or at least report both units sold/consumed and $$ price totals at the same time. If the only gains are price inflation, that is not true economic growth.
But perhaps the “illusion” of economic growth is good enough for an election year.
Hi Mish. The text that is supposed to be below each image is sucked up along the right side of the image. Might want to check your formatting. Running Win 10 with the Edge browser.
Thanks for all of your work.
I did one align left and everything after that was messed up.
Somehow it did not show on my browser
Tony Bennett said:
1) April had 5 Fridays (payday) and 5 Saturdays (big durable purchases). Any retailer will tell you that the month will likely be decent with that calendar effect.
2) Whom are they surveying? Survey is voluntary. Since the recession ended MANY retailers (including McDonalds, Walmart, Target, Kohls, etc) have stopped reporting monthly sales. So a lot of black box magic used. Oh, and note the date below. BEFORE The Gap, Macy’s, and Nordstroms reported their disasters.
“Data collection is completed by the sixth business day following the end of the reference month. Response to the survey is voluntary. Nonresponding firms are accounted for via the estimation method.”
5 BIG, COMPLETE WEEK-ENDS
Yeah, what Tony and Mish have said.
Tony Bennett said:
“The market does not see hikes are imminent, and neither do I.”
Yet $US having ANOTHER good day … despite repeated proclamations by “experts” that King Dollar weakening.
Safe haven? Is something abroad about to blow?
That bumps GDPNow up 60 points to 2.8, way above blue chip consensus. Maybe that recession is over before it even got a good start.
Yup GDPNow up to 2.8 and NY Fed up to 1.2. Mish will you ever admit to being wrong? What happened to that recession that started last year and is getting worse?
Tony Bennett said:
Good chance Mish will be proven right,
Last go round NBER did not publicly admit a recession till December 2008 … with start date of December 2007!
FOMC had the audacity at its June 2008 meeting to forecast not only no recession, but upgrade H2 2008 growth.
I have admitted I was wrong about dozens of things.
But we don’t even have a genuine 2 q estimate yet. And in case you did not notice GDP is the most heavily revised data and in case you did not notice the NBER once declared a recession after it was over.
Now, I have had enough.
It is still possible recession started in December.
I see nothing to make me change my mind – yet.
The best likely to happen is continued anemic growth.
Perhaps I have been too bearish but jackass forecasters at the Fed predicting 4% growth or whatever were far worse.
Given enough time the convoluted measurements of meta data de jour spin even the most obvious conclusions into an entropic shit pot! If bad data is reported, then immediately the counter good data is submitted. the shell game gets thicker with each passing day. This tug of war is indicating a large move to the downside.
Why is the good data always corrupt but the bad data is accurate and proves your point? Get your ego out of it please.
when did I say anything “proved my point”
Stop putting words in my mouth.
And if you want to believe 2.8% GDP, please be my guest
I started publishing both GDP numbers when the NY Fed announced their model
I would have shown both today no matter what they were.
Are gasoline sales measured by the gallons sold or total $ sold? With the price of oil up for the year and gasoline prices in my area going up by what appears to be a few cents per week, I don’t doubt that total $ are higher.
Would like to hear a discussion around the impact of Obamacare (significant) on consumer spending vs gasoline prices (marginal). If you look at consumer types around the list of struggling retailers, these are the very people most affected by the massive insurance premium hikes. Thus impacting their spending power.
*60% of statistics are false or misleading. That’s why they exist. Unlike hard facts, they can be massaged.
Take averages and medians. Drownings in lakes with average depths of 4 feet, and such.
GDP as a measure of individual economic well being is a whopper, yet everyone focuses on its components as if they are the holy grail.
Statistics seem to be a refuge of goal seeking pundits and futurists in desperate attempts to back up their prognostications.
* yes, that first sentence is a bit of an enigma.
,,,or, what do economic statistics mean to the average guy on the streets of Caracas these days?
As always, the fed will follow the invisible hand, and raise rates when MOPE fails and confidence in govt evaporates, which has started, as Trump and Sanders exemplify. The day is coming as we head into 2017, as govt pensions and everything govt starts stealing more aggressively from the private sector to save their lifestyle.
As the govt bond bubble pops, sending ever more global capital into stocks, the fed will once again add insult to injury by raising rates in hopes avoiding the title of serial bubble blower. This ignorant action will seal our fate, as the rising dollar blows up the balance sheets of all the entities around the world holding dollar- based debts.