What a difference it makes in how you analyze the data. On the surface, it is easy to go along with the headline improvement in advanced retail sales for July 2011 of being up 0.5% month-over-month, and 8.5% year-over-year. But when the data is viewed critically the inflation adjusted month-over-month change is down over 2%, and the year-over-year improvement is only 2.9%.
The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for July, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $390.4 billion, an increase of 0.5 percent (±0.5%) from the previous month, and 8.5 percent (±0.7%) above July 2010. Total sales for the May through July 2011 period were up 8.2 percent (±0.3%) from the same period a year ago. The May to June 2011 percent change was revised from +0.1 percent (±0.5%) to +0.3 percent (±0.3%)*.
Retail trade sales were up 0.5 percent (±0.5%)* from June 2011, and 8.9 percent (±0.7%) above last year. Gasoline stations sales were up 23.6 percent (±1.7%) from July 2010 and nonstore retailers sales were up 14.1 percent (±2.8%) from last year.
The difference between the headlines and Econintersect are determined by the seasonal adjustments. Econintersect feels the Great Recession has distorted the data and does not take enough into consideration New Normal trends. The seasonal adjustment methodology of US Census uses data over many years.
July was again a record month, with 6 of the last 8 months having record sales. But note that the improvement in July 2011 vs. July 2010 was not as great as the improvement in June 2011 vs. June 2010.
The impact of the monthly retail sales data on GDP is not straight forward. Real GDP (of which the consumer is over 60%) is adjusted for inflation. Further, GDP is an analysis of quarter-over-quarter or year-over-year growth.
When retail sales are adjusted for inflation, the clear down trend is visible.
The weakest areas in retail sales were sporting goods, department stores, building materials and food services.
Wholesale Sales Remain Solid in June 2011 by Steven Hansen
Nice Rebound for Business Sales In May 2011 by Steven Hansen
Auto Sales are Dismal by John Lounsbury
The Consumer is Bouncing Along the Bottom by Rick Davis
Consumers are Coming to Terms with Frugality by Rick Davis
Strong Retail Sales Do Not Point to Real Economic Growth by Steven Hansen