Retail Sales: Solid Gains Continued

Bottom Line:   Retail sales rose, a touch more than expected at the core level in July. While June sales were revised about two-tenths lower, May sales were revised higher by nearly half of a percent. Despite historic price inflation, real retail sales activity is still modestly positive. Retail sales, including autos, food, and gas grew at nearly 5% annualized in the three months ended in July, Excluding those items, sales grew over 11% annualized in the prior three months, only slightly below the pace of the prior six months, suggesting only a slight deceleration in the trend. Online sales led the gains at the core level in July, while auto sales were slower than expected, dragging down the headline gains. While auto sales are critical for the economy, the trends in the core metrics, suggest net consumption can continue at a modest to moderate pace, even as auto sales correct from the boom in 2020 and 2021. Overall, this was a solid report that confirms modest to moderate consumption growth continued in the first month of the 3rd Quarter.

Retail Sales ROSE by 0.0% in July,  compared with the market consensus for an increase of 0.1%. The June estimate was revised lower from 1.00% to 0.81%. Retail sales are now 10.3% ABOVE their year ago level; just a year ago, the year-over-year growth rate was 15.5%. Spending at motor vehicle dealers fell by 1.6%.
 
Core Retail Sales ROSE by 0.4%, compared with the market consensus for a decrease 0.1%. The June estimate was revised lower from 1.04% to 0.88%. Core retail sales are now 12.3% ABOVE their year ago level; just a year ago, the year-over-year growth rate was 15.5%.In July, gains at nonstore retailers (+2.7%), building materials (+1.5%), miscellaneous retailers (+1.5%), grocery stores (+0.2%). were partially offset by declines in gasoline stations, primarily due to low gasoline prices (-1.8%), general merchandise stores (-0.7%), and clothing stores (-0.6%).
   
Core Retail Sales ex Gasoline ROSE by 0.72% and are now 9.3% ABOVE their year ago level; just a year ago, the year over year growth rate was a solid 13.6%.