United States: Retail sales shrink in June
July 14, 2017
Retail sales surprised on the low side in June as they decreased 0.2% from the previous month. This followed May’s revised 0.1% drop (previously reported: -0.3% month-on-month) and confounded market analysts, who had expected retail sales to behave much better at a 0.1% increase. While May’s revision makes up to some extent for June’s miss and some of the weakness can be attributed to weak pricing power, the headline figure suggests weaker momentum going into Q3.
The report from the Department of Commerce showed that June’s sales values were hampered by low gasoline prices, with sales at gasoline stations down a hefty 1.3% month-on-month. Other declines included food and beverage stores and department stores. On a more encouraging note, sales at auto dealerships rose slightly in June, which was at odds with other data in the sector. Sale increases were also observed in building material and garden material stores and health and personal care retailers.
On a year-on-year basis, growth in retail sales decelerated from a revised 4.1% in May (previously reported: +3.8% year-on-year) to 2.8% in June, the lowest reading since August of last year. Non-store retailers—a proxy for e-commerce sales—posted a substantial 9.2% increase in sales in June, taking more market share away from traditional department stores, whose sales declined 3.9%.
Author: David Ampudia, Economist