Retail sales posted another strong month in June, led by autos, up 0.7% and nonstore retailers up 1.7%.

The odds the US is currently in recession took a hit today based on the Advance Retail Sales report.

Advance estimates of U.S. retail and food services sales for June 2019, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $519.9 billion, an increase of 0.4 percent from the previous month, and 3.4 percent above June 2018.

• Total sales for the April 2019 through June 2019 period were up 3.4 percent from the same period a year ago.
• The April 2019 to May 2019 percent change was revised from up 0.5 percent to up 0.4 percent.
• Retail trade sales were up 0.4 percent from May 2019, and 3.3 percent above last year.
• Nonstore retailers were up 13.4 percent from June 2018, while health and personal care stores were up 5.5 percent from last year.
• Isolated weakness: Electronics fell 0.3%, gas stations fell 3.8%, and department stores fell 1.1%.

Econoday ponders the strength in auto sales as do I.

Strength abounds in this report with the isolated weak points led by gasoline stations, where price effects tied to lower oil prices pulled down sales by 2.8 percent, and also department stores, an ailing segment of the retail sector that seems to be devolving.

The most surprising strength in the report, at least for forecasters, is a 0.7 percent jump in auto sales that conflicts with what was a flat month for unit sales (a series, however, that is clouded with special factors). Not surprising is a another surge, this time 1.7 percent for a second month in a row, for nonretailers which continue to feed off of traditional retailers such as department stores.

A key strength, and one that underscores discretionary power, is yet another strong gain for restaurants, up 0.9 percent following prior gains of 1.0 percent, 0.7 percent, and 0.8 percent. This shows that consumers, flush with confidence and fully employed, are enjoying themselves.

The list of strength goes on with both furniture and building materials snapping back with 0.5 percent gains that point to strength for residential investment. Clothing stores saw sales also rise 0.5 percent as did health & personal care stores.

The Federal Reserve may be looking across the oceans for reasons to justify a rate cut, but any justifications aren't coming from the US consumer which makes up the vast bulk of GDP. And however much inflation may be flat, consumer spending is not to blame.

These are not "recession now" numbers even if one views the auto numbers with complete skepticism.

Opinions Vary

Two things about today's data. On retail -- it was one of the worst months for June ever on a nonseasonally adjusted basis. On production -- Q2 decline confirmed the industrial recession has arrived.

— David Rosenberg (@EconguyRosie) July 16, 2019

Trucking Disagrees as Well

1. Recession Looms: Cass Freight Index Negative for 7th Month
2. Trucking Bloodbath: 2,500 Truck Drivers Lose Jobs

Regardless, a rate cut on July 31 is still baked in the cake.