Friday, September 14, 2007

Retail Sales Disappoint

From Marketwatch:

U.S. retail sales increased a healthy 0.3% in August, but all the gains were for cars and trucks, the Commerce Department said Friday.

Excluding motor vehicles, sales fell a disappointing 0.4%, below expectations, and the biggest decline since last September.

Sales were slightly weaker than expected, but the upward revision to July's sales figures to 0.5% put the level of sales near expectations. Economists surveyed by MarketWatch had expected total sales to rise 0.6%, with a 0.2% increase in sales excluding autos. See Economic Calendar.

Sales were tepid outside of autos, although furniture and electronics sales showed some life. Sales at the malls, grocery stores, restaurants, and garden centers were weak.

From CNBC:

Sales at U.S. retailers rose a smaller-than-expected 0.3% in August and they recorded the biggest decline in almost a year when car sales were stripped out, a government report showed on Friday.

Excluding motor vehicles and parts, retail sales fell 0.4% last month, the sharpest drop since September 2006, the Commerce Department said.

Analysts polled by Reuters were expecting sales to gain 0.4% and to rise 0.2% when cars and parts were stripped out.

Retail sales excluding cars, parts and gasoline, fell 0.1%, the steepest decline since April.

So-called core retail sales -- which exclude cars, gasoline and building materials -- were unchanged in August after a 0.8% gain in July.

Here's a link to the Census Report.

The report has a several very revealing categories.

First, total retail sales for the the period of 06/07 - 08/07 (the latest three month period) only increased .6% from the the 03/07 to 05/07 period. This is a rolling three month indicator. For the same period, total sales ex-autos rose 1.2%. This indicates auto sales are a big drag right now. In fact, for the same set of three month periods, auto sales are down 1.9%.

Looking at the year over year changes, let's first get the implicit GDP price deflator. According to the BEA, the GDP price level was 116.347 in the second quarter of 2006 and 119.532 for the second quarter of 2007. That's an increase of 2.73%.


Total retail sales increased 3.7%.
Retail Sales Ex-Autos increased 3.9%


Total Retail: about 1%
Total Retail Less Autos about 1.2%.

These are not impressive numbers.