 | Retail sales increased 0.1% in June |
|
| Posted Under: Data Watch • Retail Sales |
Implications: The soft patch continues to dissipate. Retail sales beat consensus expectations in June, increasing 0.2% including revisions to previous months. Excluding gas – everyone knew gas sales would be down due to the drop in oil prices – retail sales were up a solid 0.3% in June. Moreover, retail sales are still being adversely affected by the supply-chain disruptions coming from Japan. Motor vehicle sales bounced back in June, rising 0.8%, but they still have a long way to go as production conditions in Japan rebound. In the past year, total retail sales are up 8.1% and sales excluding autos are up 7.9%. "Core" sales (which exclude autos, building materials, and gas) were up 0.1% in June and are up 5.5% in the past year. Factoring-in services as well as inflation, real consumer spending will probably be up at a 1% annual rate in Q2. Consumer spending continues to rise for two key reasons. First, earnings are growing due to more jobs, more wages per hour, and more hours per worker. Second, consumers' financial obligations (debt service plus other recurring payments like rent, car leases, homeowners' insurance, and property taxes) are now the smallest share of disposable income since 1994. Add on top of that a recovery in the auto sector as Japan heals, and the future continues to look bright for retail sales.
Click here to read the entire report.
|
|