Revisions did take May from -0.3% to -0.1% so sales were essentially flat for the last two months.
Consumer spending in second-quarter GDP will not be getting a lift from the retail component as retail sales fell an unexpected 0.2 percent in June. This follows a revised 0.1 percent decline in May and a revised 0.3 percent gain for April which proved to be the quarter’s only respectable showing.
Readings show wide weakness with vehicle sales coming in with a marginal 0.1 percent increase, the same for furniture and also electronics & appliances. Declines include food & beverage stores, down a sharp 0.4 percent, and department stores down 0.7 percent following the prior month’s 0.8 percent plunge. Restaurants are also weak, down 0.6 percent for the third decline in four months. Gasoline sales fell 1.3 percent reflecting price weakness. Nonstore retailers, which include e-commerce, are a positive in the report with a 0.4 percent gain as are building materials rising 0.5 percent gain.
But there really aren’t very many positives in today’s report, one that points to a surprising lack of consumer spirit and one that will not be raising estimates for second-quarter GDP.
Advance Retail Sales
Supposedly auto sales were up 0.1% in June, 0.9% in May, and 0.5% in April. This is either one hell of a seasonal adjustment or massive channel stuffing by manufacturers to dealers. I suspect both, but especially channel stuffing.
- On May 2 (April Numbers) I reported Auto Sales Puke Again: Year-Over-Year Totals: GM -6%, Ford -7.2%, Toyota -4.4%, Fiat-Chrysler -7.0%.
- On June 1 (May Numbers) I reported Motor Vehicle Sales Flat, Hope Turns to Second Half: What About Fleet Sales? Incentives?
- On July 3 (June Numbers) I reported Auto Sales Weak Again, Average Loan Hits Record 5.75 Years: Don’t Worry “Plateau Expected”.
Mike “Mish” Shedlock