Retail Sales Outpacing All Expectations in July

Retail Sales for the month of July are now out after a much softer than expected report in June. We have already seen some of the same-store sales data with weakness. Or was there really weakness? The Commerce Department showed that the July reading came in up 0.8%, and even the ex-autos retail sales came in with a reading showing that sales were up by 0.8%.

Today’s reading was released at the same time as the Producer Price Index came in hotter than expected, and these figures were also much better than what the same-store sales trends might have led you to believe. Bloomberg was calling for the headline reading to be +0.3% and the best estimate was only +0.4%. So that +0.8% actual figure is a surprise. Even on the ex-autos report, Bloomberg was calling for those retail sales to come in at +0.4% and the best estimate was +0.7%.

Today’s report is showing that Joe Public is more robust than what the broad expectation has been signaling. All you have to do is look back at the -0.7% headline for June and the ex-autos in June being down by 0.8%.

The total gains came to $403.93 billion in today’s report. The nonstore retailers (catalogs and online only) were up 1.5% and the gain in cars and parts was up 0.8%. Gas station retail was up by 0.5% for the month.

Maybe this is not exactly robust, but it is far better than what the pool of economists was calling for. Before calling any major victory today, we would note that RetailMetrics has said in the past that July is often considered the throwaway month of the quarter as it is ahead of the back-to-school season.

JON C. OGG