Big Miss in Retail Sales vs. Expectations; Trend Change or Another 'Soft Patch'?

By: Mike Shedlock | Mon, Jul 15, 2013
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Retail sales were up 0.4% in June compared to Bloomberg estimates of +0.8%. May retail sales were revised lower, to +0.5% from an originally reported +0.6%.

The increase seems healthy enough until you dive into the details. Here are some retail sales comments from Bloomberg to help put things into perspective.

That last bullet point explains why the next GDP number will likely be below stall speed.

Yet economists still predict the US economy will expand at 2.3% in the third quarter. I will take the under (not that there is much meaning to GDP numbers in the first place).


Census Bureau Report

Let's now take a look at some charts from the ADVANCE MONTHLY SALES FOR RETAIL AND FOOD SERVICES JUNE 2013 report by the Census Bureau.


Retail Sales vs. Previous Months

Retail Sales vs. Previous Months


Retail Sales vs. Last Year

Retail Sales vs. Last Year


Retail Sales Synopsis

Retail Sales Synopsis


Trend Change or Another "Soft Patch"?

Note the numbers for motor vehicles and parts dealers, and also for auto and other motor vehicle dealers vs the rest of retail sales.

How sustainable are those numbers? I suggest not very. Next note furniture and home furnishing stores.

Strength in those numbers reflects the strength in housing. How sustainable is housing with the huge rise in mortgage rates in the last month? Once again, I suggest not very.

Yet, the consensus view is this somehow represents a bottoming action in the economy rather than a topping action. Time will tell which view is accurate.

 


 

Mike Shedlock

Author: Mike Shedlock

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Mike Shedlock

Michael "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Visit http://www.sitkapacific.com/ to learn more about wealth management for investors seeking strong performance with low volatility.

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