Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Bio
X •  LinkedIn
   Bob Stein
Deputy Chief Economist
Bio
X •  LinkedIn
 
  Retail Sales Rose 0.2% in June
Posted Under: Data Watch • GDP • Inflation • Retail Sales
Supporting Image for Blog Post

 

Implications:  Retail sales lagged consensus expectations in June, rising only 0.2% for the month.  The slight gain in June was largely powered by nonstore retailers (think internet and mail order), with an assist from an increase in auto sales.  The largest decline in June was again at gas stations, where, due to lower seasonal prices, sales are down 22.7% from a year ago.  Look for a rebound in July due to higher fuel prices so far this month.  Other areas of relative weakness were at grocery stores and for building materials, garden equipment and supply dealers.  “Core” sales, which exclude the most volatile categories of autos, building materials, and gas stations, and are an important measure for estimating GDP, rose 0.5% in June and are up 4.6% from a year ago. These sales were also up at a 2.2% annual rate in Q2 versus the Q1 average.  Plugging this into our models suggests a moderate gain in “real” (inflation-adjusted) consumer spending (goods and services, combined) in Q2 at about a 1.2% annual rate.  That’s well faster than growth in real average weekly earnings, which were unchanged in Q2, and shows consumers having to dip into COVID savings in order to maintain spending levels.  In the last twelve months, overall retail sales are up only 1.5%, clearly lagging inflation.  Sales at restaurants & bars, the only look at the service sector we get in this report, rose 0.1% in June.  These sales are up a healthy 8.4% from a year ago versus the overall retail gain of 1.5%, showing how consumer spending has continued to shift toward services.  However, the relative slowness in June may be a sign that this shift is nearly complete among restaurants and bars.  Our view remains that the tightening in monetary policy since last year will eventually deliver a recession in the next twelve months. Expect some deterioration in retail sales through the rest of the year.

Click here for a PDF version

Posted on Tuesday, July 18, 2023 @ 11:39 AM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
Follow First Trust:  
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2024 All rights reserved.