Consumers Are Back to Leading the Charge
J: The Census Bureau gave us much appreciated good news in their Advance Retail and Food Services Sales report of May 12. As the chart below shows, total retail and food services sales rose to a record $474.9 billion, seasonally adjusted. (L: Remember ALWAYS seasonally adjusted unless we say otherwise.) That was an increase of 0.4 percent from March, whose total was revised from a decline of 0.2 percent from February to an increase of 0.1 percent. You should note that on April 26 the Census Bureau revised all of these data back to January 2008 as a result of the 2015 Annual Retail Trade Survey.
L: You should also note that being an economist is a weird job. How many jobs depend on historical data that keep changing?
J: As always, various components of the total grew faster or slower than the 0.4 percent average in April as compared to March. The star performer was the “nonstore retailers” (think Amazon and various catalog purveyors), which grew by 1.4 percent in April and posted a huge 11.9 percent increase from April 2016.
Second was “electronics and appliance stores” with a 1.3 percent increase from March. That only put them up 0.7 percent from a year earlier though.
Next came “building material and garden equipment and supplies dealers” with a 1.2 percent increase from March and up 9.3 percent from April 2016. This is a reflection of strong residential construction activity and great weather in much of the country for all the gardeners and landscape lovers out there.
Fourth place went to “auto and other motor vehicle dealers.” They were up 0.8 percent from March and 4.7 percent from April 2016.
Consistent with all the dismal news we’ve had lately from Target, Sears, Costco and Wal-Mart, the “general merchandise” category was down 0.5 percent for the month and 0.7 percent for the year. The department store subset (Macy’s, Nordstrom, etc.) actually managed a gain of 0.2 percent for the month, but was down 3.7 percent for the year.
The chart below shows the year-over-year percentage change in the total. That was 4.5 percent from April. The percentage increase for the first four months of 2017 compared to the same period in 2016 is 3.5 percent. All this good news from consumers suggests that the second quarter is off to a rollicking start. We can expect more good news on retail sales in next month’s report on June 14.