United States: Retail sales disappoint in August
September 15, 2016
Nominal retail sales contracted 0.3% in August compared to the previous month. The result contrasted the upwardly-revised 0.1% expansion in July (previously reported: -0.1% month-on-month) and caught the markets by surprise as they had forecast a 0.2% expansion.
The report from the Department of Commerce showed that the contraction in August partly reflected lower sales across most categories, particularly in the sales of furniture and building material, as well as at gasoline stations as fuel prices declined during the month. Meanwhile, the closely-watched core—or control group—retail sales, which excludes cars, gasoline and building materials, fell 0.1% in August and came in just below the flat figure in July.
On an annual basis, retail sales decelerated from a 2.4% increase in July to a 1.9% expansion in August. Sales at department stores declined further in August (-5.0% year-on-year), but sales at so-called non-store retailers—a proxy for e-commerce sales—continued to show strong growth (+10.9% yoy). This suggests that American consumers are increasingly opting to make purchases online.
Author: Ricardo Aceves, Senior Economist