BusinessWeek details:

U.S. retail sales declined in April and May, pulled down by a sharp drop in gas prices. But even after excluding volatile gas sales, consumers barely increased their spending.

The Commerce Department said Wednesday that retail sales dipped 0.2 percent in May. That followed a revised 0.2 percent decline April. The back-to-back declines were the first in two years.

The weakness reflected a 2.2 percent plunge in gasoline station sales. Still, excluding gas station sales, retail spending rose just 0.1 percent in May. And it dropped 0.1 percent in April. That left retail spending roughly flat outside of gas sales for the two months, a sign that slower job growth and paltry wage increases may be leading consumers to pull back on spending.

The Washington Post details:

Americans bought more electronics, started home improvement projects and updated their wardrobes last month, inspired by warmer weather and a healthier job market.

The increase capped a strong quarter of gains and contributed to a brighter outlook among economists for growth in the January-March quarter. Businesses are responding by restocking their shelves at a steady pace, a sign that they expect the trend to carry over into the spring.

More retail spending also helped offset a decline in confidence among homebuilders. And it could ease concerns about March hiring, which slowed to half the pace of the previous three months.

Bloomberg details:

European retail sales unexpectedly rebounded from four months of declines in January, as growth in France helped to offset a drop in Germany.

Sales rose 0.3 percent from December, when they fell a revised 0.5 percent, the European Union’s statistics office in Luxembourg said today.

The Sun Times details:

Americans rebounded from a weak holiday season and stepped up spending on retail goods in January. The latest government report on retail sales pointed to a slowly improving economy.

Retail sales rose at a seasonally adjusted 0.4 percent last month, the Commerce Department said Tuesday.

Consumers spent more on electronics, home and garden supplies, sporting goods, at department and general merchandise stores and at restaurants and bars. They also paid higher prices for gas.

Peter Boockvar (via The Big Picture) details:

December retail Sales were light relative to expectations, rising just 0.1% month over month headline and falling 0.2% ex auto’s vs up 0.3% for both that was expected. Sales ex auto’s and gasoline were flat vs an expected rise of .4% and also taking out volatile building materials, sales fell 0.2%.

November was revised up slightly for all categories but not enough to offset the December weakness relative to expectations. Sales weakness was seen in the 3.9% drop in electronics sales after just a 0.5% rise in Nov. Department store sales fell after zero growth in November and online retail sales fell 0.4% after a 1.7% rise in November.

Bloomberg details the latest retail sales:

U.S. retail sales rose in November at the slowest pace in five months, indicating faster job growth may be needed to spark the biggest part of the economy.

The 0.2 percent gain in sales followed a 0.6 percent advance in October that was more than initially reported, Commerce Department figures showed today in Washington. Economists projected a 0.6 percent November increase, according to the median forecast in a Bloomberg News survey.

The WSJ details:

U.S. retail sales rose in October as Americans spent their dollars at electronics stores and on the Internet, a sign that consumers are willing to open their wallets ahead of the all-important holiday shopping season.

Separately, U.S. wholesale prices in October dropped at the fastest monthly pace since February 2010, a move that gives the Federal Reserve leeway to boost the economy and jobs with its monetary stimulus.

Retail and food services sales climbed 0.5% last month from September to an adjusted $397.67 billion, the Commerce Department said Tuesday. That came on top of a strong 1.1% gain in September retail sales.

My buddy Sami Mesrour (from Blackrock) had a write up earlier this month titled Follow What I Do, Not What I Say; Consumer Spending and Consumer Confidence that outlines the surprise rebound in retail sales (bold mine):

The US consumer is feeling down. Several indicators of confidence collapsed over the summer with the declines beginning in May as job growth slowed, and the bulk of the drop in sentiment occurring during August. It is likely that the intense focus on the country’s deficit problem and the attendant prospects of lower government spending going forward were the main drivers in the decline of consumer expectations. Forecasters are concerned over this development because of what it implies for the growth of consumer spending—historically sentiment has been a good reflection of sales in the US.

This time, however, something strange is going on: consumers are apparently saying one thing, but doing another

The WSJ details:

Retail and food services sales were virtually unchanged from the previous month at an adjusted $389.50 billion, the Commerce Department said Wednesday.

Economists surveyed by Dow Jones Newswires had forecast a 0.3% increase. July retail sales were revised down to a 0.3% gain. The Commerce Department originally estimated 0.5%.

Back in February, I outlined that retail sales data was extremely noisy during periods of volatile prices as the data is shown in nominal (rather than real) terms. As the chart below shows, the relationship between retail sales (again, a nominal figure) and commodity prices (as reflected by ETF DBC) is strong.



This in itself fed into the PPI data that was released today, showing energy related prices have retreated from earlier this year, and my expectation is that CPI will come in below consensus tomorrow (we shall see).

So, retail sales are stronger than shown? Not so fast. Looking at the components of retails sales we see weakness in big ticket items (autos, furniture) and restaurants (details of why that may be troubling can be seen in the Pub Power index), offset by electronics and sporting goods (back to school?).



Net net, the consumer (who the U.S. economy relies on for ~70% of growth) is definitely stretched and the economy is definitely slowing.

Source: BLS / Yahoo Finance

Marketwatch details:

The biggest increase in sales took place at gas stations, grocery and liquor stores, auto retailers and online and catalog merchants. Sales fell at clothing and building-supply stores.

It's not a surprise that this was the result in a period when commodity prices (in the form of food and energy) spiked. Removing these volatile sectors of the retail market and we get a much more mundane 0.04% increase in the month.

Are there signs of life in the economy? Absolutely! But was this the "monster surprise" to the upside bounce in retail consumption we've been waiting for? Hardly.

First the details per Reuters:

U.S. retail sales were stronger than expected in November as consumers shopped despite high unemployment and producer prices rose, evidence the economic recovery gathered steam in the fourth quarter.

The Commerce Department said on Tuesday total retail sales increased 0.8 percent, advancing for a fifth straight month, as consumers snapped up clothing and other items at the start of the holiday season and receipts at gasoline stations surged.

In addition, sales for October were revised up to 1.7 percent from a 1.2 percent gain. The sturdy rise in sales was a boost for consumer spending, which accounts for more than
two-thirds of U.S. economic activity.

The issue (as I've mentioned before and just last week in the inventory numbers) is this is NOMINAL, not real. Lets take a look at the jump in sales by category to see why this is relevant.



In dollar terms, 46% (yes almost 50% of the jump in nominal dollar terms) of the increase was on gasoline, 16% on clothing, and 13% on food. What we know for certain is that gas and food jumped in price in October and November (clothes jumped 1.2% in October... not sure about November, but we'll know more with the CPI release later this week).

So are things improving? Absolutely, but this is not the "blow out" number it first seemed.

Source: Census

Marketwatch details:

U.S. retail sales rose for the fourth straight month, climbing 1.2% in October, as consumers flocked to auto showrooms and made more purchases online. Sales for September and August were also revised higher. Excluding motor vehicles, retail sales rose 0.4% in October, the Commerce Department reported Monday. Economists surveyed by MarketWatch had forecast total sales to rise by 0.7%, or 0.4% excluding the volatile automotive segment. Retail sales have risen at an annual rate of 6.3% over the past three months. Sales were revised to a 0.7% increase in September, compared to an original reading of 0.6%. August sales were revised up to 0.9% from 0.7%

Marketwatch details:

Retail sales showed decent growth in August, economic data showed Tuesday, easing fears that the U.S. economy would stall out in coming months.

Retail sales rose 0.4% on the month, the Commerce Department said. It marked the second straight increase and was the largest gain since March.

Good news... BUT, the breakdown is interesting.



The largest jumps were in gas and food purchases (due to a jump in gas prices and food in August), then some solid growth in small purchases (clothing, sporting goods, health care), followed by a a decline in credit related purchases (furniture, autos, and electronics).

One month is likely just noise, but it will be interesting to see if large credit oriented purchases, in a credit tightening environment, are on the decline to pay for smaller purchases.

Source: Census

Bloomberg details:

European retail sales were unchanged in June as households reduced spending in Germany and France.

Sales in the 16-nation euro area showed no increase from May, when they rose 0.4 percent, the European Union’s statistics office in Luxembourg said today. That matched the median forecast of 19 economists in a Bloomberg News survey. From a year earlier, June retail sales gained 0.4 percent after rising 0.6 percent in May.

European consumers may remain reluctant to boost spending as companies continue to cut wage costs and eliminate jobs to shore up earnings. Unemployment held at 10 percent in June, the highest in almost 12 years.

While developed Europe consumption continues to stagnate, Eastern Europe has bounced back surprisingly well (albeit off of rather extreme lows).



Source: Eurostat

The WSJ details:

U.S. retail sales tumbled a second straight time in June, falling more than expected in a sign consumer spending is slowing and draining steam from an economy saddled with high joblessness. Sales decreased 0.5%, the Commerce Department said Wednesday. Economists surveyed by Dow Jones Newswires had forecast a 0.3% decline.

The report was mixed, with some merchants reporting increases and others recording decreases. Excluding auto and gas sales, retail sales rose 0.1%. The bigger-than-expected drop in the headline number followed an upwardly revised 1.1% drop in May. Originally, May sales were estimated falling 1.2%.

Retail sales is a pivotal indicator of consumer spending, which makes up much of economic activity in the U.S. The second decline in a row dealt a blow to an economy with an unemployment rate of 9.5%, and will increase concerns about the recovery.

Looking at the components of the release, we see an interesting bifurcation...

Down were:

• Autos (data which was already available comparing the strength in June to May)
• Gas (a function of the decline in the price of oil)
• Furniture / building materials (crash in new home sales)
• Sporting Goods (no clue)

Up were "smaller" consumer goods purchases:

• Electronics (iPhone?)
• Clothing
• Health stores
• Restaurants (a good sign?)

Source: Census

BusinessWeek details:

Sales at U.S. retailers unexpectedly dropped in May, signaling consumers boosted savings as employment slowed and stocks fell.

Purchases decreased 1.2 percent, the biggest drop since September 2009, following a 0.6 percent April gain that was larger than previously estimated, Commerce Department figures showed today in Washington. Demand plunged at building-material stores, reflecting the end of a government appliance rebate, and sales fell at auto dealers, in contrast to industry figures which showed a gain.

Building materials (which fell back to earth following a spike in April to take advantage of the end of the tax credit) and a 20% decline in the price of oil led the fall in gasoline (these figures are nominal). Subtracting those outliers we still have a decline, which shows weakness. Just not as weak as early reports would indicate.

Reuters details:

Sales at U.S. retailers rose more than expected in April, lifted by a surprise gain in motor vehicle purchases, government data showed on Friday.

The Commerce Department said total retail sales rose 0.4 percent following an upwardly revised 2.1 percent surge in March. Sales in March were previously reported to have increased 1.9 percent. Retail sales have now increased for seven straight months.

Analysts polled by Reuters had forecast retail sales rising 0.2 percent last month. Compared to April last year, sales were 8.8 percent higher.

Motor vehicle and parts purchases unexpectedly rose 0.5 percent after increasing
6.7 percent in March. Analysts had expected auto sales to fall in April, after
automakers reported a decline in unit sales.

Month over Month



Year over Year



Source: Census

Bloomberg details:

Japan’s retail sales gained at the fastest pace in more than a decade in February as the economic recovery spread to households.

Sales rose 4.2 percent from a year earlier, the Trade Ministry said today in Tokyo. That was the biggest monthly jump since March 1997, when they advanced 12.4 percent, according to Bloomberg data. The median estimate of 12 economists surveyed was for a 1.6 percent climb.

An export-fueled recovery and government stimulus spending are beginning to create jobs and support wages, improving prospects for companies including Dydo Drinco Inc. A turnaround in employment will continue to support consumer spending, according to economist Julian Jessop.

From a month earlier, retail sales unexpectedly climbed 0.9 percent, the second consecutive gain. None of the eight economists surveyed by Bloomberg News predicted an increase, and their median estimate was for a 1.2 percent drop.

Consumer confidence advanced for a second month in February, led by sentiment about employment, a sign households may boost outlays in coming months as fears of being fired recede. Japan’s economy added the most jobs in more than three decades in January, unexpectedly sending the unemployment rate to a 10- month low of 4.9 percent. Workers’ pay declined at the slowest pace in 19 months.

While the 4.2% year over year jump is against a collapsed low, the fact that the Japanese consumer has come back to near pre-crisis spending levels is encouraging for any lasting recovery.



Source: Meti.GO