Core Retail Sales Disappoints In August, July Revised Down

While consensus expected a 0.1% drop in headline retail sales in August, BofA was more optimistic (due to inflation – remember retail sales data is ‘notional’ not ‘real’)…

BofA was correct on the headline retail sales print – which rose 0.3% MoM – but we note that July was revised down to a 0.4% drop (from unchanged initial print)

Source: Bloomberg

But core (Ex-Autos) tumbled 0.3% MoM (against expectations of unch) and Ex-Autos and Gas also disappointed (+0.3% MoM vs +0.5% MoM exp)…

On a year-over-year basis, both headline and core retail sales growth slowed…

Source: Bloomberg

Once again, all these numbers need to be adjusted for inflation – which surprised to the upside in August – and that suggests demand pressures on a volume basis.

Gas stations saw sales tumble 4.2% MoM (as prices dropped) but motor vehicles & parts dealers saw sales rise 2.8% MoM…

Online sales dropped for the first time since March…

Finally, the Control Group – which feeds through to GDP – was very disappointing. Against expectations of a 0.5% MoM rise, it was unchanged in September.