Retail sales data for the month of August issued today by the United States Department of Commerce and the National Retail Federation were very consistent in showing sequential declines and annual gains.
Commerce reported that August retail sales, at $474.8 billion, were down 0.2% compared to July and up 3.2% annually. And it added that total retail sales from June through August saw a 3.2% increase compared to the same period a year ago.
Non-store retail sales, which represent e-commerce activity, rose 8.4% in August, with building materials and garden equipment and supplies dealers up 7.5%.
Like Commerce, the NRF reported that August retail sales were also down 0.2% compared to July, with an annual gain of 3.7%, which was 0.5% of Commerce’s tally. Annual growth was up 3.4% based on a three-month moving average, it added.
“Retail sales for August were truly a mixed bag, with monthly gains in July reversed in August,” NRF Chief Economist Jack Kleinhenz said in a blog posting. “The bottom line is that consumer spending is uneven but remains resilient and the key contributor to U.S. economic growth. While it is too early to assess the impact Hurricanes Harvey and Irma have had on the economy and retail sales, there’s no doubt that they will impact consumer spending – particularly in certain sectors – as Florida and Texas work to rebuild.”
NRF noted that online and non-store sales fell 1.1% compared to July while heading up 8% on an unadjusted basis annually.
Annual retail sales gains remain firmly intact based on NRF data, with total retail sales seeing annual growth every month going back to November 2009 and retail sales, as calculated by the NRF, which exclude automobiles, gasoline stations and restaurants, rising annually for every month but one since the beginning of 2010.
The NRF recently stated 2017 retail sales are expected to increase between 3.2%-3.8%, as opposed to its forecast of 3.7%-4.2% earlier this year.
“Meaningful revisions to retail sales numbers by the Census Bureau and similar revisions to personal income and consumption by the Bureau of Economic Analysis have both affected our forecast and have required us to adjust our 2017 sales projection,” Jack Kleinhenz. “While weaker-than-expected spending in the first quarter along with decelerating inflation has also contributed to the revision, NRF anticipates stronger sales heading into the fall and holiday seasons.”
When NRF made its initial retail sales estimates earlier this year, it also highlighted these data points, which remain unchanged:
- the economy is expected to gain an average of approximately 160,000 jobs a month, which it said is down slightly from 2016 but consistent with labor market growth;
- unemployment is expected to drop to 4.6 percent by the end of the year; and
- economic growth is likely to be in the range of 1.9 to 2.4 percent
“The early effects of Hurricane Harvey showed up in August retail sales, as expected, but the bigger story is that consumer spending looks to have been subdued even earlier in the summer,” wrote IHS Markit Associate Director, US Economics James Bohnaker in a research note. “Retail sales initially appeared to be gaining momentum in June and July, but downward revisions make it very unlikely that consumer spending will come close to the 3.3% growth rate achieved in the second quarter. The report is disappointing, but not overly concerning. We expect to see some payback in retail sales once hurricane effects dissipate. The decline in auto sales was expected and should reverse within a few months, as more than one million vehicles will need to be replaced in the aftermath of two destructive hurricanes. Households will also look to begin the rebuilding process later this year, which will lead to stronger demand for building materials, furniture, and household durables.”
About the Author
Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman
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