Retail Sales Post Modest Gain

The Commerce Department reported(.pdf) that retail sales rose less than expected last month, up only 0.2 percent in June following an upwardly revised gain of 0.5 percent in May.

The consensus estimate for June was a gain of 0.6 percent and the miss was largely due to a surprise decline of 0.3 percent in auto sales last month. Retail sales less autos rose 0.4 percent and when both autos and gasoline are excluded, sales also rose 0.4 percent.

Sales increased for nine of the thirteen major categories, paced by a gain of 1.1 percent at general merchandise stores (e.g., department stores) and an increase of 0.9 percent at nonstore retailers (e.g., internet sales) and health & personal care stores.

Declining categories were led by home improvement stores where sales fell 1.0 percent and food service where receipts were 0.3 percent lower.

Interestingly, even with the recent weakness, the spring surge still leaves the six-month rolling average above the long-term average  as shown below.

Absent a plunge in July spending, this metric will look even better next month when the nearly one percent decline from January falls out of the calculation, however, there is a clear downward trend going back over three years. This is even more pronounced in the year-over-year data that peaked in early-2011 and just recently dipped below two percent, which is less than zero after accounting for inflation and population growth.