May Retail Sales on the surface was not good, as the headline figure fell by 1.2%, ex auto’s fell by 1.1% and ex auto’s and gasoline fell by .8%. Expectations were for up .2%, .1%, and .2% respectively. HOWEVER, building materials were the main swing factor, falling 9.3% m/o/m after 2 months of strong gains. If you take out gasoline and building materials, sales rose .1%, thus the headline prints look messy but looking under the hood it’s not as bad as it seems. Motor vehicle/parts fell by 1.7%, clothing sales fell by 1.3% and sales at department stores were down 1.8%. Sales rose at restaurant/bars, on line, sporting goods, health/personal care, furniture, electronics and supermarkets. After seeing May comps and vehicle sales last week, today’s data should not be as market moving as it is as it only includes 25% of actual data with the rest being estimated.
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