Economists were looking for a big rebound in retail sales in April from a dismal showing in March.
The rebound came, but it was less than the Econoday consensus estimate of .6%. However, revisions took March from -0.2% to +0.1%.
Retail sales did recover in April but not as much as expected, up 0.4 percent overall and up 0.3 percent excluding autos which both miss Econoday’s consensus estimates by 2 tenths. Core readings are likewise soft, up 0.3 percent ex-auto ex-gas which misses the consensus by 1 tenth and up only 0.2 percent for the control group where a 0.4 percent gain was the call.
Vehicle sales rose 0.7 percent in April following three straight sizable declines. Nonstore retailers continue to outperform with electronics & appliances showing a second strong gain. But showing a third month of weakness and hinting at lack of demand for basic goods is the general merchandise category where the department store subcomponent, in an echo of company news out of the sector, shows only marginal strength.
Revisions are helpful but again but by much. The overall rate for March is revised 3 tenths higher to plus 0.1 percent but February, at minus 0.2 percent, is unrevised. The upward revision for March will be a modest plus for first-quarter GDP where the first estimate on consumer spending came in barely positive and at an expansion low.
Consumer confidence may be through the roof but retail sales, and consumer spending in general, has been stuck on the ground. Despite a very easy comparison against a very weak first quarter, second quarter consumer spending is off to no better than a moderate start.
Retail Sales
Retail Sales by Category
For the year, January through April, general merchandise store sales are down -.3 percent.
Department stores have been getting killed. For the year, department stores sales are down a whopping 5.2 percent.
Mike “Mish” Shedlock
I wonder how the sales are doing at the Salvation Army thrift shop retail stores. That’s where I buy my clothes. Yesterday I bought a practically brand new pair of Sketchers casual shoes for $10 that would have cost me $90 or more at a high-end department store. While some in our consumer driven society might hide it from friends and neighbors, I’m not proud. I brag on it. And I take partial credit for bringing the mainstream retailers down. It’s fun to beat them at their own game. I invite you to join me.
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At a certain point of time when you have too much crap, the prospect of buying more is just not as exciting as before.
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Retail shopping is an elixir for many. Also, as rates rise, the carrying cost of impulse shopping rises. I’m wondering what happens when all these 0% for 18 months card promotions mature, along with all the underwater lease bring backs.
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I agree with SMF. I’m only in my early 30s, but wife and I don’t buy very often anymore. In fact, we keep giving stuff away as we pare down on what we actually need and use. I don’t buy new electronics or appliances unless what we have stops functioning, is not fixable or is no longer compatible. Obviously, I don’t fit in with the apple upgrade every 6 months crowd.
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And these lousy year-over-year comparisons are not even adjusted for inflation.
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Where does Amazon fit into those numbers? In that 10.7 percent increase column? Not sure about the shopping habits of others here, but it seems the stores don’t stock what I’m looking for anymore,,,most of the time they are out of stock. Most tell me they can get it in a week or so. Amazon gets it here in a couple days, and saves that “six bits” a mile driving costs.
Granted, there are those who are evolving into thinking maybe it’s not vital to spend money they don’t have on stuff they don’t need. Demographics at work here,,,or maybe evolution? I mean, disposal costs at the land fill are rising faster than retail prices, creating a log jam in a few suburban two car garages, maybe?
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Yes – Amazon is a non-store retailer
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Maybe they are starting to listen to Dave Ramsey. No debt.
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$474958m Total Monthly Retail v’s $454696m last April .Y/Y growth of 4.45%. Robust and healthy.
I remember only too well last April when the high Inventory/Sales ratio chatter was going to blow up the casino.Or the April before that when the market was going to tank because we were coming off QE, or the April before that when the Baltic Dry Index reading was looking anemic. Now we are at all time highs.
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Don’t confuse the stock market with the economy.
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Quit with the cherry picking.
The unadjusted number the spread only $14 billion … that includes Easter (in 2016 Easter in March) … allow for that … and factor in CPI and we’re talking FLAT LINE.
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CRE in the on deck circle to take a beating.
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Interesting article in the NYT which states that a large part of profits by the large retailers comes from their credit card portfolios. Without that their current financial situation looks even scarier – it will be a disaster when their clientel can’t pay the CC bills anymore aka House of Cards.
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I can believe it.
Time to look over their “Cash Flow Statements” with a fine tooth comb…..
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All businesses eventually become banks. GE is a bank that sells jet engines. Ally/GM is a bank that makes cars. Pretty soon wireless companies will figure out that they can hide interest in phone financing and another race to the bottom for network access pricing will begin.
Consumers are more willing to accept a small amount of pain over a very long time instead of a short shock to the savings account once. In the case of business customers, they figure they’ll make money on the float. As long as interest rates are artificially low the game works.
If Tim Cook is as smart as they say, I’m guessing when he repatriates all that cash he’s going to use it to bring financing in house. That way he can make Apple devices “cheap” while not affecting the profit margin.
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I WA TRYING TO FIND A CHART ON RETAIL SALES FROM 1950 TO PRESENT BUT NONE OF THEM WERE ADJUSTED TO INFLATION. WONDER WHAT THE CHART WOULD LOOK LIKE IF IT WAS?
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You need to adjust for the population as well!
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https://fred.stlouisfed.org/series/RRSFS (real – inflation adjusted sales)
https://fred.stlouisfed.org/series/RSAFS (without inflation adjustment)
Series only goes to 1992
One needs to adjust for population growth as well
If I get time later may do so
Have company this weekend
Mish
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I just did some napkin math here with US population numbers, and a quick “per-capita” division on the first and last numbers (1992 and 2017) on those inflation adjusted sales numbers, and I come up with a very rough estimate of about 16% actual “inflation and population adjusted growth”, across the 25 year span.
Of course, what inflation numbers does that graph use? Certainly not the ones from shadowstats. 😉
I realize that with all the other factors at play over the last 25 years, this was an almost meaningless exercise, but I felt like checking, just to satisfy my own curiosity.
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Per my previous comment, that “amortizes” across 25 years as a rough ballpark YoY increase of 0.6%
Again, probably meaningless, but somewhat interesting, IMHO.
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Every day the department stores receive a new batch of sale price tags. They mark the price up 25% and put it on sale for 25% off. I don’t play that game. I compare prices on line without burning gas. Free delivery gets the business.
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You’ve got it – and most people have caught on by now.
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Note the US has 5 times the retail sqft per capita versus West Europe. ( who are richer than us BTW )
This suggests we are looking to some serious carnage among commercial property companies.
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Eventually demographics and convenience will reach a critical mass when online shopping begins to crush retail stores. We are only in the beginning phases believe it or not. Millennials are almost exclusively shopping online. This trend will only accelerate. Short Sears, Jo Penney, Macy’s, etc for long term down trends.
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April sales overstated. Cars and parts go up 3.4% in value terms! Really. Yet physical units declined by 4.7%, rebates were back to 2009 levels (so high that Toyota, which registered its first fall in net sales in five years, cited US rebates as one of the key reasons its profits fell), and second hand car prices tanking. Add in higher fuel prices and it is unlikely that retail sales actually grew adjusted for inflation.
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Anecdotal evidence from Grand Junction CO. Home Depot was wall-to-wall yesterday, had to drive around the lot like it was Christmas. Wallmart, Target, Cabella’s parking lots all full. New burger joint opened up a few weeks ago, had to stand in line at 14:30 and very few open tables. Line of cars and employee directing traffic in the parking lot at 17:00.
Burger only average BTW, had a much better one over at tired, old, and probably dying Denny’s a few weeks earlier (and no lines, fast service and better price).
Retail is still relevant, but all the hyper-specialized stores of the 1980s have been replaced by online retail. Probably a good thing too. I just bought a new camera lens. It was a chunk of cash, and I was able to shop around easily to get the best price, albeit with a very slow delivery. But for basic stuff, bulk shipping to a retail outlet is still the way to go. I probably wouldn’t have even known that lens existed without online retail, but using Amazon to get TP and toothpaste delivered is just dumb if you have a car. And it is very hard to get your annuals and weed-and-feed delivered.
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