August 2018 Retail Sales

Retails sales decelerated in August 2018 according to data from the Census Bureau.  Retail receipts grew 0.1 percent in the period after gaining 0.7 percent in July.  And that’s the rub; July’s tally was upwardly revised from an already strong 0.5 percent count in the initial report.  This strength gave August a tough comparison, so even though the month-over-month growth figure decelerated, it is coming off a really strong period. 

Excluding autos from the tally, the month looks much stronger.  Without motor vehicles and parts, the monthly gain (after the upwardly revision) was 0.3 percent which is on the heels of a 0.9 percent gain in July. 

Various categories of sales were mixed.  Clothing receipts waned, but this could be due to weaker apparel prices as we mentioned in yesterday’s Consumer Price Index note. Furniture and home furnishing fell as well.  However, most other areas of the indicator improved.  Electronics and appliance stores gained 0.4 percent.  Gasoline station revenues were up 1.7 percent, largely influenced by increased prices.  Sporting goods, hobby, book & music stores experienced 0.2 percent growth.  And of course, nonstore retail sales increased 0.7 percent after jumping 1.5 percent a month earlier. 

Atlas’ favorite line item added to the total as well.  Food services & drinking places experienced a 0.2 percent uptick in revenues.  From a year earlier, these receipts have jumped 10.1 percent.  This represents discretionary spending since households can choose to eat at home if they are feeling less enthusiastic about their future.  Fortunately, there is no letdown in this category. 

Retail sales represent roughly one-fifth of the U.S. economy, giving us a look at a large portion of output each month.  Any deterioration in this indicator’s trend would be alarming.  Fortunately, there are no concerns from the vantage point of retailers in general.  Sure, there are those that are hurting as the retail sector adapts to the way Americans consume goods, but the overall segment of the economy looks strong.