The Keynesian economists and the monetarists at the Fed are singing a happy tune today as retail sales bounced 0.6 percent vs the Econoday consensus estimate of 0.3%.
The consumer was back in the stores last month in a July retail sales report, headlined by a 0.6 percent monthly gain, that not only exceeds top expectations but also includes sizable upward revisions. Nonstore retailers, vehicle dealers, building materials stores lead the report — all major categories. Secondary readings are all strong: up 0.5 percent ex-autos, up 0.5 percent ex-autos ex-gas, and up 0.6 percent for the control group.
Revisions are prominent in this report with June revised 5 tenths overall to plus 0.3 percent from an initial minus 0.2 percent. And May gets an upward revision too, now unchanged vs minus 0.1 percent.
One the weakest of all the consumer readings, retail sales are now back into the fold with other indications on consumer spending, which are positive and in line with full employment. Note that the upward revisions to June and May will be positives for second-quarter GDP revisions.
Across the Board Spending Increases
Every category increased except electronics and appliance stores, down 0.5%, and gasoline stations, down 0.4%. General merchandise stores rose 0.1%.
Supposedly, motor vehicle sales were 1.2% in July following a 0.9% gain in June. This is unbelievably bizarre in the face of actual auto sales reports.
The revisions help explain 2nd quarter GDP numbers, but now economists will likely revise the second quarter up.
Mike “Mish” Shedlock
Look at the retail stocks today. The numbers are BS………I am an online retailer and sales haven’t been good since November of last year.
spending alot more for alot less.just bought one of those crummy Chinese laptops,went ahead and bought 2 ,i’m guessin i’ll get maybe a year (if that) outta one,prices are up 100 bucks plus from last year.if this is deflation I pray I don’t live to see inflation
Hi Mish – July merchandise was seasonal surge & nothing more. My niece in Alabama said her kids started back to school 8/1, and have just started here in NE. The malls & retail outlets have been covered up with kids & parents doing back-to-school shopping. I expect to see a sharp decline in August.
Barry Rose, CBF
Murphy Law of Technology – a complex system that works is invariably found to have evolved from a simple system that works.
I drive past an abandoned mall (no active businesses left) that is used as an overflow lot by auto dealerships on my way to work. There is also a bus stop in the center of the parking lots, with free parking for commuters who take the bus into the center of Pittsburgh, to avoid paying steep $15-20/day parking fees
Its north side slowly filled up starting in the fall of last year until it had seven rows deep of unsold 2017 model year vehicles.
They have sold about two rows of those vehicles. There are still more rows in the back of the commuter parking section that are so far away that it’s hard to see them, but they appear to be full. There are cars in the far back rows, even on a weekend.
If the auto makers continue to push product that isn’t selling, there’s an entire south side of the dead mall left to fill with 2018 model year vehicles.
I believe the evidence of my own eyes more than I believe government statistics.
Retail is dead and cars aren’t selling.
JC Penney lost 62 million dollars last quarter…Today, XRT retail ETF is down 2.5 percent…Americans are now carrying over 12 TRILLION dollars in debt…Seems to this
observer that someone is blowing some big time smoke…
As the top 5% of earners are retailers’ dominant customers they will continue to spend as long as the stock market keeps going up. Still, taking this into account, the figures look too strong and this is exemplified by the auto sector.