September 2019 Retail Sales

There wasn’t a lot to celebrate in the September 2019 Retail Sales release from the Census Bureau; however, Atlas will find a way to cheer it on later in this note.  But first we must deal with the negatives.  The headline is a good place to start as the overall statistic dropped 0.3 percent, giving back most of the prior period’s 0.4 percent gain.

There were many negative signs throughout the report.  Auto and other vehicle sales dropped one percent.  Receipts at building material and garden supply dealers were also off a full one percent.  Gasoline stations’ revenues were dipped 0.7 percent, and the top-line of sporting goods retailers declined 0.1 percent.  Likewise, gross sales at general merchant stores fell 0.3 percent, including a drop of 1.4 percent at department stores.  Even nonstore retailers’ receipts were off 0.3 percent, gently pushing against its year-over-year trend which reached 12.9 percent.

As mentioned earlier, Atlas is cheering portions of this report.  In particular, the food services & drinking places experienced an uptick of 0.2 percent in gross sales.  This discretionary segment of the indicator suggests consumers still feel comfortable enough with their circumstances to spend money at restaurants instead of opting for the less expensive alternative, eating at home.  The other thing worth mentioning is that the year-over-year trend for headline retail sales is at 4.1 percent, not bad at all. 

Consumers continue leading this economy.  Not only are they the largest component of consumption, but they are persistently increasing their outlays.  This should continue providing our economy some cover from recession.  However, growth isn’t at rates suggesting America is immune to the vagaries of the business cycle, but Atlas remains mostly optimistic for now.