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 4/16/07 For Mar 2007 | |||||||||||||||||||||||||
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Highlights
Retail sales in March were much improved in March and February was revised up notably. Sales were quite healthy even after discounting autos and gasoline sales. Retail sales increased 0.7 percent in March, following a 0.5 percent rise in February. February's overall number was above the market projection for a 0.6 percent gain in retail sales. Overall sales in February were initially estimated to be a 0.1 percent increase. Excluding motor vehicles, retail sales rose 0.8 percent in March, following a 0.4 percent increase in February. The consensus had forecast a 0.9 percent jump in retail sales excluding motor vehicles. The February ex-autos series was initially reported as a 0.1 percent decline. Excluding gas station sales, retail sales posted a gain of 0.4 percent in both March and February. Excluding both gas station and motor vehicles components, retail sales increased 0.4 percent in March, following a 0.3 percent rise the prior month. Other components were generally positive.
Retail sales were generally positive in March. Gains included: motor vehicle dealers, up 0.4 percent; furniture, up 0.6 percent; building materials, up 1.4 percent; food & beverage stores, up 0.2 percent; health & personal care, up 0.1 percent; gasoline stations, up 3.1 percent; clothing, up 2.4 percent; sporting goods, up 1.1 percent; general merchandise, up 1.1 percent; miscellaneous stores, up 0.6; and food services, up 1.2 percent.
Declines were few and included electronics, down, 1.9 percent, and nonstore retailers, down 3.3 percent.
Year-on-year, overall retail sales in March rose to up 3.8 percent from up 3.5 percent in February. Excluding motor vehicles, February's year-on-year sales advanced to up 3.9 percent, compared to up 3.5 percent in February. Excluding motor vehicles and gas station sales, year-on-year sales in March were up 3.8 percent - unchanged from February.
While an early Easter likely helped to boost clothing and higher gasoline prices added to service station sales, the numbers are broadly positive and clearly indicate a resilient consumer sector. With housing and manufacturing in the doldrums, the consumer is keeping the forward momentum going. Equities should like the new numbers while bonds should not, boosting rates. However, today's Empire State manufacturing report - which came in barely above dead flat - will be partially offsetting.
Retail Sales rose only 0.1 percent in February, following no change in January. The consumer sector had been a key source of strength for the economy but now is in question. Even excluding motor vehicles, retail sales slipped 0.1 percent in February, following a 0.2 percent gain in January. But severe winter weather may have been a factor and the consumer sector may actually be stronger than the last two months' data. An early Easter is expected to have boosted March sales.
Retail sales Consensus Forecast for March 07: +0.6 percent
Range: +0.2 to +1.3 percent
Retail sales excluding motor vehicles Consensus Forecast for March: +0.9 percent
Range: +0.5 to +1.2 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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