Retail Sales

Aron · October 17, 2024, 12:55pm

I=6
Retail sales rose 0.4% in September, better than 0.3% estimate

U.S retail sales rose 0.4% in September, better than 0.3% forecast and 0.1% in August.
On a yearly basis, retail sales rose 1.74%, down from 2.16% in August (revised upwards from 2.13%).
Excluding autos, retail sales increased 0.7%, above 0.3% estimate.
Control group sales rose 0.7%, above 0.3% estimate.
The numbers are not adjusted for inflation which rose 0.2% on the month.

Aron · November 15, 2024, 1:54pm

I=6
Retail sales rose 0.4% in September, better than 0.3% estimate

U.S retail sales rose 0.4% in October, better than 0.3% estimate and lower than 0.8% in September (revised upwards from 0.4%).
On a yearly basis, retail sales grew 2.8%, exceeding 2.0% in September (revised upwards from 1.74%).
Excluding autos, retail sales increased 0.1%, below 0.3% estimate.
Control group sales fell 0.1% against expectations for a 0.3% increase.
Retail sales were driven by autos.
- The numbers are not adjusted for inflation which rose 0.2% on the month.

Magaly · February 14, 2025, 7:57pm

Retail sales took a surprising drop in January

Worst retail sales drop in nearly two years. Since Dec was had a very strong holiday spending and the weather events in January, the dropoff to January could just be noise, and be a one-off.
However weakness in the control group that directly flows into GDP (spending is 70% GDP) is not to be dismissed entirely.

The growth concerns highlighted by the weak Jan retail sales print reverse some of the upside pressure on rates as the Fed has to weigh implications for both sides of its mandate.

Based on market pricing, there is actually a higher probability of a rate cut in June now than there was before the CPI report, with 10y yields down even more on growth concerns.

Details:

Retail Sales -0.9%, Exp. -0.2%. At 4.2%, year-over-year growth is still above most of last year.
Retail Sales ex-auto -0.4%, Exp. 0.3%
Control Group -0.8%, Exp. 0.3% (direct input for GDP)
Retail sales is very volatile, but the miss was outside normal levels. It was nearly a 5 sigma event for control group retail sales based on the economists surveyed by Bloomberg.
Auto Dealers had a bad month and were the main drag on headline retail sales.
Nonstore retailers (i.e. online sales) were the big drag on control in Jan '25, recording the worst monthly decline since the immediate aftermath of the pandemic in July '21.

https://www.census.gov/retail/sales.html

moritz · February 14, 2025, 10:18pm

If we look at Retail Sales Ex Auto MoM, there is a 0.7% difference between the survey expectation (0.3%) and the actual (-0.4%).
The miss on headline retail sales was 0.7% as well.
This indicates to me that there is no surprise coming at all from auto but from other categories? Is this surprise solely coming from online sales or other sources? (Interesting case you can find those insights with reasonable effort) (The chart is a bit hard to read. It looks like online sales are down 0.4% m/m? If we know what was expected for online sales before the release we know how large the surprise was)
If yes, that could be a headwind to Meta?

Magaly · February 17, 2025, 3:48pm

There arent expectations reported for individual categories.

This is the more granular data from the report:

Auto sales are very volatile (that’s why they are excluded from the control group), and despite dropping -2.8% m/m. Is one of the categories expected to have been most affected by weather, and the pull forward of demand at the end of 2024 due to tariff expectations.
Online sales (-1.9 m/m) from what I got reading analyst posts were the more surprising, since weather is not expected to impact this category, contrary online sales should go up due to weather.
The fact restaurants and some retailers actually increased, it tells me weather did not have much impact, and weakness is beyond that at least in january. Could be just a bit of a pullback in spending after the spending was very high at the end of 2024.

I think would be premature to just made a conclusion based on this month only, but february data should be able to clear more. Maybe I could make a summary of retailers earnings, especially related to online, and see what they are saying currently.

moritz · February 18, 2025, 8:44pm

Hmm you mean if those online retailers have a cautious Q1 outlook? I think if you can find something e.g. using GPT in 10-20 minutes it could be interesting but otherwise I would not invest too much time into it for the following reasons

Nonstore retailers are still up 4.7% y/y which looks quite healthy too me. (Maybe December was even exceptionally strong) (Main argument)
Most advertisers on Meta are small businesses. Finding something on them is probably even harder and the correlation between performance of large listed online retailers and smaller online retailers is unsure.
As you say the data can be quite volatile so probably no reason yet to worry (esp. given strong growth y/y) and I would need to see stronger signs than one weaker month of online sales to consider reducing the Meta position.

Do you think maybe Bloomberg or one of those other sources has expectations by individual category? (If yes maybe some people you follow on the topic post pictures on X about it - Just something to keep in mind. Not worth investing too much time searching but great sources/people like those are always valuable for our sources database)

Magaly · February 19, 2025, 4:41pm

Yes, I agree with you, and currently the thesis I also most support is that December 2024 was particularly a strong month.

Consumer spending was up 0.7% m/m in December, one of the strongest for 2024, and similar to December 2023.
Retail sales also ended the final months of 2024 very strong, also a 0.72% m/m in December.

So, yes, I will only take this more seriously if we see a continuation of this weakness in coming months.

Magaly · March 13, 2025, 6:56pm

Bank of America expect a modest retail sales report based on its card data, below current consensus but better than January

“BAC card spending per HH was up 0.3% m/m in February on a SA basis. We expect the Census Bureau’s February retail sales ex-autos figure to come in flat, and the core control group (retail sales ex autos, gas, building materials and restaurants) to rise 0.2%”

https://x.com/neilksethi/status/1900152926473003334/photo/1

Aron · March 17, 2025, 12:48pm

I=6
Retail sales rose 0.2% in February, less than expected , Control group which feeds into GDP rose 1%, above estimate

Retail sales rose 0.2% in February, less than 0.6% expected but above the 1.2% drop in January (revised upwards from -0.9%).
It rose 3.1% on a yearly basis, below 4.2% in the previous month.
Excluding autos, retail sales rose 0.3% as expected.
‘Control group’ sales rose 1% in February, above 0.4% estimate.
Nonstore retailers reported a 2.4% increase, health and personal care rose 1.7%, while food and beverage grew 0.4%.
Bars and restaurants declined 1.5%, gas stations fell 1% while motor vehicle & parts dealers reported a 0.4% decline .
S&P 500 futures and Nasdaq 100 were little changed following the report.

Magaly · March 17, 2025, 10:16pm

Assessment Retail Sales February 2025

Overall, a mixed report (downward Revisions to last month and barely a recovery this month), with some nice underlying strength in many areas (online sales continue to be very strong despite last month decline), but as expected it looks like there’s going to be some tariff front-running overhang, and some concern around the bars/restaurants since discretionary spending could be slowing, in line with trave demand slowing according to airlines guidance.

Year over year growth seems resilience still, though slowing in recent months (and below historical averages), and accounting for inflation is almost flat growth.

Despite the monthly improvement, this report caused the Atlanta Fed’s GDPNow model to lower Q1’s real GDP growth from -1.6% to -2.1%, led by a decline in the growth of consumer spending from 1.1% to 0.4%. (Model is not reflecting the gold imports adjustment, which they will do on March 26)
So, low or even flat spending is still expected for Q1 2025.

This is mostly goods-related spending (only about 35% of PCE), for services spending, will have to wait for the PCE report, and see Atlanta GDP adjustment for additional data.