Retail Sales: A Positive Turn Despite Headline Miss

Bottom Line:   Retail sales were slightly less than expected in June at the headline level. But core sales were in line to slightly stronger than expected. Moreover, there were modest upward revisions to prior data. Auto and parts dealers saw stronger sales for the third month, while gasoline sales were lower for the ninth consecutive month amid lower prices at the pump. Grocery store sales were also lower (and revised from positive to negative in May) with lower food prices. Online retail was surprisingly strong, driving the control group above expectations, even before July's Amazon Prime Day, which anecdotal reports suggest was strong this year. Home furniture stores saw a rebound, but building and garden supply store sales were lower, leaving the housing impact on retail consumption mixed. Overall, the trend in retail sales has turned from "weak to modest" to "modest to moderate," with the core sales in the last three months annualizing at 5.6% growth, faster than the pace of the prior six and twelve months. Adjusted for inflation, retail sales have likely turned from negative real growth to a modest positive.

Total US Retail Sales ROSE 0.19%  in June (consensus was +0.5 %), Apr revised up to +0.43% from 0.37%, May revised up to +0.51% from 0.34%.Core Retail Sales (excludes Autos, Parts & Gas) ROSE 0.32%  (consensus was +0.3 %).
Sales in the Control Group (Core less food services and building supply) ROSE 0.56%  (consensus was +0.3 %).