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Retail sales increase above expectations with modest downward revisions July core (“control group”) retail sales rose 0.5% m-o-m, slightly stronger than expectations (Nomura and Consensus: 0.4%).  

Key Quotes:

“Core retail sales in June, however, were revised down to a 0.1% decline from no change (note that core retail sales are used for estimating personal consumption of GDP). Overall, the report suggests continued momentum in personal spending in Q3 after a transitory slowdown in end-Q2. We continue to expect solid consumer spending data this year in light of personal tax cuts now fully in effect and firm consumer fundamentals.”

“Details of the report suggest broad-based gains across most product categories except for a few pockets of softness. Sales by nonstore retailers were up a solid 0.8% m-o-m. Given that the magnitude of the gain is within the recent trend, it appears that the impact of Amazon’s Prime Day event on retail sales data was not particularly strong. The seasonal factors for nonstore retailers in 2018, relative to 2016-17, indicate that the Census Bureau’s seasonal adjustment may now more accurately account for changes in consumer spending patterns around Prime Day relative to previous years, muting the overall effect on aggregate retail sales.”