Implications: The details of today's report on retail sales make it much better news than the headlines suggest. Retail sales increased a tepid 0.2% in June, falling short of the robust 0.6% gain the consensus expected. Sales excluding autos increased 0.4%, also falling short of consensus expectations. However, sales were revised up substantially for April and May. Including those upward revisions, overall sales increased a solid 0.5% and sales ex-autos increased 0.9%. Despite some news stories bemoaning consumer spending, the data show retail sales are accelerating. In the past three months, retail sales are up at a 5.5% annual rate versus a gain of 4.3% in the past year. "Core" sales, which exclude autos, building materials and gas, increased 0.5% in June and were up 1% including revisions to prior months. Core sales have risen in eleven of the past twelve months. These sales are key input into the GDP data and it looks like "real" (inflation-adjusted) consumer spending, goods and services combined, will be up around a 2% annual rate in Q2. In other news this morning, the Empire State index, which measures manufacturing sentiment in New York, increased to 25.6 in July from 19.3 in June. It's now the highest level in four years, signaling that the factory sector continues to expand. On the inflation front, trade prices remain calm. Import prices rose 0.1% in June and are up 1.2% from a year ago. Almost all the gain since last year is due to petroleum; import prices ex-oil are up only 0.1% from a year ago. Export prices declined 0.4% in June and are up only 0.2% from last year. Ex-agriculture, export prices are up 0.3% from last year.
Click here for PDF version
|
|
Posted on Tuesday, July 15, 2014 @ 10:35 AM
|