- Q1 GDP Growth Jumps 1.1% on Strong Personal Consumption
- A Strong March Leads to a Surge in Chinese GDP in Q1 2023
- Durable Goods Retail Sales Suffer from High Interest Rates and Wary Consumers
- Choppy GDP Means UK Should Avoid Q1 Recession
- Japanese Consumer Confidence Jumps to Highest Level in Over a Year
- The End of Summer Sees the End of Disinflation in Europe
- Labor Market Indicators are Starting to Unify on Easing in Hiring
- Inflation and Tight Financial Conditions Weigh on the German Consumer
- Euro Area Money Supply Contracts for the First Time Since 2010
- Dismal Economic Data Out of Germany
- Core Durable Goods New Orders See Gentle Uptrend in July
- More UK Data Pointing to Q3 Decline
- Whispers of a UK Contraction in Q3
- Japan's Core Inflation Resumes Uptrend in July
- Early July Economic Data Leads to a Sharp Increase in Q3 Growth Expectations
- UK CPI: Energy Inflation Crashes but Services Inflation is Still Sticky
- China's Weak Start to Q3 Means More PBoC Easing
- Bank of Japan is Too Optimistic on Inflation
- The Bank of England Pauses in a Near Split Decision
- UK Inflation August Update: A Precursor to the Bank of England's Announcement
- Housing Starts Tumble in August Amid Rising Mortgage Rates
- US Retail Sales Grow at Fastest Monthly Rate Since the Start of the Year
- US Consumer Prices Surge in August Driven by Energy Costs
- August NFIB Survey Showed a Tough Environment for Small Businesses
- All Signs Point to a Weaker Labor Market in August
- Thoughts on GME and This Week in the Stock Market
- Record Home Price Levels Point to Strength in Post-Pandemic Economy
- The Stock Market Looks Overvalued, but It's Probably Not
- China GDP Growth Surpasses Expectations
- President-elect Joe Biden Introduces His "American Rescue Plan"
- Political Polarization Intensifies with Another Impeachment Along Party Lines
- Metal Demand Has a Bright Future in 2021 and Beyond
- What Happened to That US-China Trade Dispute?
- Civil Unrest, A Rising Threat to the 2021 Economy
- What's in the $900 Billion Relief Plan?
US Retail Sales Grow at Fastest Monthly Rate Since the Start of the Year
September 14, 2023
US retail sales expanded once again in August, extending a streak of gains to five months. In August, the headline growth of retail sales was 0.6% MoM which is the fastest since January 2023. The annual rate of growth only slowed by -0.1 ppts to 2.5% YoY last month. The more core measure of total retail and food services sales was up just 0.2% MoM since gasoline sales played a significant impact in the headline number. No matter where the spending is going, one thing seems to be true, the US consumer is still spending and proving to be resilient in the face of increasingly murky economic waters.
As evidenced by the difference between the headline and core figures in August, there was a significant increase in gasoline sales of 5.2% MoM. The increase in gas sales was almost entirely the result of rising energy prices. In the CPI report yesterday, we saw that the gasoline index increased a sharp 10.6% MoM which meant that drivers in August were paying a hefty premium. Despite the jump to end the summer, the YoY growth in gas sales is still sharply negative at -10.3% YoY (though this is much higher than the -20.9% YoY in the month before).
Growth rates in other categories were mixed. There was growth in clothing sales (0.9% MoM), electronics (0.7% MoM), and health & personal care sales (0.5% MoM). On the other hand, there were some categories that saw significant moves down like sporting goods sales(-1.6% MoM), miscellaneous store sales (-1.3% MoM), and furniture sales (-1.0% MoM). It is worth pointing out that the furniture and building materials store segments have the worst YoY growth rates (excluding gas sales) at -7.8% YoY and -4.9% YoY respectively because they are related to more expensive purchases that may require consumers to need access to credit to purchase. Additionally, both have some relation to the real estate industry which is currently the most struggling area of the economy. The fact that both of these categories saw their YoY declines intensify suggests that there is some underlying consumer weakness that is being hidden by rosier headline results.
The bottom line is that as long as consumers are spending, the economy is growing. And at the moment, retail spending is keeping pace with price growth and in some cases slightly ahead of it. There are some underlying trends that point to weakness ahead, but so far in Q3, it looks like consumption will be on track to be a positive contributor to GDP growth. Of course, things can and likely will change as tighter financial conditions eventually show out in full force. For now, resilience is the keyword.