September 2017 Retail Sales
Submitted by Atlas Indicators Investment Advisors on October 17th, 2017
Retail sales jumped in September 2017 according to the Census Bureau’s data. After falling a revised 0.1 percent in August (originally -0.2 percent), the value of transactions climbed 1.6 percent as the third quarter came to a close. Versus a year earlier, retail sales increased 4.4 percent. However, it appears some of the data was influenced by difficult weather in the Gulf Coast in late August and mid-September.
Auto sales surged as vehicles lost or damaged by hurricanes were replaced. In September alone dealers’ revenues gained 3.6 percent. For some context, the year-ago comparison was only 4.0 percent better, a figure which includes the most recent jump. Car sales were not the only component influenced by weather as the value of transactions at gasoline stations increased 5.8 percent due in large part to spiking prices in the aftermath of the storms.
All weather-related issues aside, the economy seems to be moving forward. Atlas’ favorite line in this report continued to improve. Spending at food services & drinking places advanced 0.8 percent in the period and have increased 2.7 percent in the past year. Atlas pays attention to this line because it represents discretionary spending, the type of spending done when consumers are feeling confident about their situations. If Americans were feeling less sanguine about the economy, they would be choosing to eat at home more frequently than is currently the case.
Retail sales are indicating the virtuous portion of the economic cycle remains firmly in place. When the current expansion begins to wane, this indicator should show signs of weakening since it represents such a large portion of the consumers’ monthly budget. For now, no such warning is present.
