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2008 Economic Calendar |
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Resource Center » U.S. & Intl Recaps | Release Dates | Why Investors Care | Today's Calendar
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Retail sales measure the total receipts at stores that sell durable and nondurable goods. Consumer spending accounts for two-thirds of GDP and is therefore a key element in economic growth. Why Investors Care
| Released on 7/13/07 For Jun 2007 | |||||||||||||||||||||||||
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Highlights
Retail sales unexpectedly fell sharply in June. Overall retail sales fell 0.9 percent in June, following a 1.5 percent surge in May. The June figure was well below the consensus forecast for no change and even the lower bound forecast of -0.6 percent. It was the largest drop in retail sales since the August 2005 drop of 1.5 percent. For the latest month, weakness was widespread but led by declines in motor vehicle sales, furniture, and building materials. Excluding service station sales, retail sales decreased 0.9 percent in June, after a 1.3 percent boost in May. Excluding both motor vehicles and gas stations, sales declined 0.4 percent, following a 1.6 percent advance the month before. The market had forecast a 0.2 percent rise in sales excluding motor vehicles and gas station sales. The decline even exceeded the lower bound forecast of -0.2 percent.
Year-on-year, overall retail sales in June fell to up 3.8 percent from up 5.1 percent in the month before. Excluding motor vehicles, May's year-on-year sales declined to up 4.2 percent, compared to up 4.9 percent in May. Excluding motor vehicles and gas station sales, year-on-year sales in June fell to up 4.6 percent from up 5.0 percent the prior month.
Today's report indicates that the consumer sector may be in transition but it is hard to say how much since the June weakness follows such strength in May. Still, moderation in the consumer sector - if not too much - would be welcomed by the Fed.
Retail sales rebounded a sharp 1.4 percent in May, following a 0.1 percent dip in April. May gains were led by gasoline sales but increases were widespread and robust. Excluding gas, retail sales advanced 1.2 percent in May, while excluding just motor vehicles, sales increased 1.3 percent. Excluding both motor vehicles and gas stations, sales rebounded 1.0 percent, following a 0.2 percent drop the month before. Retail sales are a little volatile and it should not be surprising to see a pull back in June in some categories. Unit sales of U.S.-made vehicles, released last week, declined to 11.6 million annualized in June from 12.2 million in May, suggesting that the motor vehicles component in retail sales will likely decline for the month. However, the service station component will be under upward pressure from higher oil prices - although gasoline prices have been lagging the increases in crude oil prices.
Retail sales Consensus Forecast for June 07: 0.0 (flat) percent
Range: -0.6 to +0.6 percent
Retail sales excluding motor vehicles Consensus Forecast for June 07: +0.2 percent
Range: -0.2 to +0.7 percent
![[Chart]](chart.gif)
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Nearly 75 percent of the time, changes in monthly retail sales are between +1 percent and -1 percent. However, there are many months in which the monthly change falls outside that range. Most of the time, excessive increases or decreases are due to higher/lower spending on motor vehicle sales. Year-over-year changes in retail sales can be volatile as well, but tend to be smoother than monthly changes. |
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