Retail Sales - July 2010, comes back to positive

Released on 8/13/2010 8:30:00 AM For Jul, 2010 Prior Consensus Consensus Range Actual Retail Sales - M/M change -0.5 % 0.5 % 0.2 % to 1.0 % 0.4 % Retail Sales less autos - M/M change -0.1 % 0.2 % 0.0 % to 0.7 % 0.2 %

Highlights Retail sales made a comeback in July – but it mainly was due to a jump in auto sales. Overall retail sales in July rebounded 0.4 percent, following a 0.3 percent decrease in June. Analysts had called for a 0.5 percent boost. Excluding autos, sales gained 0.2 percent, following a 0.1 percent down tick in June. The July ex-auto number equaled the median forecast. Sales excluding autos and gasoline slipped 0.1 percent, following a 0.2 percent boost in June. The underlying trend for consumer spending is soft, indicating that the recovery is slowing. Numbers are not weak enough to confirm a double dip. On the news, markets were little changed.

Market Consensus Before Announcement Retail sales in June shrank 0.5 percent, following a 1.1 percent decline in May. The June decline was led by a decline in motor vehicle sales with lower gasoline station sales also contributing. Sales ex autos only edged down 0.1 percent, following a 1.2 percent drop in May. Sales excluding autos and gasoline rebounded 0.1 percent, following a 1.0 contraction in May. Recent news is mixed for the strength of July sales. Unit new auto sales rebounded 3.3 percent. Chain store sales for July were mixed.

Definition Retail sales measure the total receipts at stores that sell durable and nondurable goods. Consumer spending accounts for two-thirds of GDP and is therefore a key element in economic growth.  Why Investors Care

Nearly 75 percent of the time, changes in monthly retail sales are between +1 percent and -1 percent. However, there are many months in which the monthly change falls outside that range. Most of the time, excessive increases or decreases are due to higher/lower spending on motor vehicle sales. Year-over-year changes in retail sales can be volatile as well, but tend to be smoother than monthly changes. Data Source: Haver Analytics