August Retail Sales: Down 0.2% MoM, Worse Than Forecast

The Census Bureau's Advance Retail Sales Report for August showed a decrease over the July figures. Headline sales came in at -0.2% month-over-month to one decimal. The headline number was below the Investing.com consensus of 0.1%. Core sales (ex Autos) came in at 0.2% MoM. Figures were revised going back to June 2016.

Here is the introduction from report:

Advance estimates of U.S. retail and food services sales for August 2017, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $474.8 billion, a decrease of 0.2 percent (±0.5 percent)* from the previous month, and 3.2 percent (±0.7 percent) above August 2016. Total sales for the June 2017 through August 2017 period were up 3.2 percent (±0.7 percent) from the same period a year ago. The June 2017 to July 2017 percent change was revised from up 0.6 percent (±0.5 percent) to up 0.3 percent (±0.1 percent).

Retail trade sales were down 0.3 percent (±0.5 percent)* from July 2017, and up 3.3 percent (±0.7 percent) from last year. Nonstore Retailers were up 8.4 percent (±1.6 percent) from August 2016, while Building Materials and Garden Equipment and Supplies Dealers were up 7.5 percent (±1.9 percent) from last year.[view full report]

The chart below is a log-scale snapshot of retail sales since the early 1990s. The two exponential regressions through the data help us to evaluate the long-term trend of this key economic indicator.

The year-over-year percent change provides another perspective on the historical trend. Here is the headline series.

Core Sales

Here is the year-over-year version of Core Retail Sales.

 

"Control" Purchases

The next two charts illustrate retail sales "Control" purchases, which is an even more "Core" view of retail sales. This series excludes Motor Vehicles & Parts, Gasoline, Building Materials as well as Food Services & Drinking Places. The popular financial press typically ignores this series, but it a more consistent and reliable reading of the economy.

Here is the same series year-over-year. Note that the current level is above both highlighted values at the start of recessions since the inception of this series in the early 1990s.

 

For a better sense of the reduced volatility of the "Control" series, here is a YoY overlay with the headline retail sales.

Bottom Line: August sales showed a decline over the previous month's improving figures. August Retail Sales were worse than forecast. Later we'll take a closer look at Real Retail Sales.