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