Retail sales measure the total receipts at stores that sell durable and nondurable goods. Consumer spending accounts for two-thirds of GDP and is therefore a key element in economic growth. Why Investors Care
| Released on 3/13/07 For Feb 2007 | |||||||||||||||||||||||||
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Highlights
Retail sales in February came in quite soft. Retail sales nudged up 0.1 percent in February, following no change in January. February's overall number was below the consensus forecast for a 0.3 percent boost in retail sales. Excluding motor vehicles, retail sales slipped 0.1 percent in February, following a 0.2 percent gain in January. The markets had expected a 0.3 percent increase in retail sales excluding motor vehicles. Once again, gasoline prices have played a key role in changes in dollar volume retail sales. Gasoline station sales rose 1.2 percent in February, following a 0.5 percent decline in January. Gasoline prices actually supported sales. Excluding gas station sales, retail sales were unchanged in both February and in January. Excluding both gas station and motor vehicles components, retail sales edged down 0.3 percent in February, following a 0.3 percent gain in January. Other components were mixed as some analysts speculate that severe winter weather kept consumers indoors
Retail sales were mixed in February. Gains were seen auto dealers, up 0.9 percent; food & beverage stores, up 0.6 percent; gasoline stations, up 1.2 percent; miscellaneous stores, up 0.3; and nonstore retailers, up 2.8.
Declines were seen in furniture, down 1.7 percent; electronics, down, 0.3 percent; building materials, down 1.4 percent; clothing, down 1.8 percent; sporting goods, down 0.8 percent; general merchandise, down 0.6 percent; and food services, down 1.2 percent. Health & personal care store sales were flat.
Year-on-year, overall retail sales in February were up 3.2 percent, rising from up 2.2 percent in January. Excluding motor vehicles, February's year-on-year sales were up 3.1 percent, unchanged from the prior month. Excluding motor vehicles and gas station sales, year-on-year sales in February were up 3.4 percent - down from up 3.9 percent in January.
Today's report shows a softer consumer sector. However, there is some significant doubt as to whether the consumer is really slowing as much as indicated at face value. Severe winter weather kept the consumer indoors in a number of major markets in the U.S. during parts of the month. We'll have to wait for other data to get a better handle on the consumer sector. Generally, the bond market would probably like the data anyway but concern over gasoline supplies, gasoline price inflation, and overall inflation may nudge rates up anyway.
Retail Sales were unchanged in January, following a 1.2 percent surge in December. Weakness in January was primarily in autos and in gasoline - with gasoline pulled down by a price drop. Excluding both gas station and motor vehicles components, retail sales increased 0.5 percent in January, following a 1.0 percent rise in December. More recently, motor vehicle sales have stabilized and gasoline prices, based on independent survey data, have firmed. These point to a stronger sales figure for February - especially since healthy income numbers should support further gains.
Retail sales Consensus Forecast for February 07: +0.3 percent
Range: +0.1 to +0.5 percent
Retail sales excluding motor vehicles Consensus Forecast for February: +0.3 percent
Range: 0.0 (flat) to +0.5 percent
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Nearly 75 percent of the time, changes in monthly retail sales are between +1 percent and -1 percent. However, there are many months in which the monthly change falls outside that range. Most of the time, excessive increases or decreases are due to higher/lower spending on motor vehicle sales. Year-over-year changes in retail sales can be volatile as well, but tend to be smoother than monthly changes. |
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