April 2011 Advance Retail Sales: Not Bad, Not Good

US Census’ advance data shows retail sales for April 2011 is up a solid 7.6% year-over-year (YoY)  and 0.5% month-over-month (MoM) using seasonally adjusted data.  Econintersect’s analysis confirms that retail sales were strong – but sales may actually be down MoM.

Add some analysis of the effects of inflation, holidays, and where the increases occurred – and good data becomes only mediocre.

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for April, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $389.4 billion, an increase of 0.5 percent (±0.5%) from the previous month, and 7.6 percent (±0.7%) above April 2010. Total sales for the February through April 2011 period were up 8.1 percent (±0.5%) from the same period a year ago. The February to March 2011 percent change was revised from +0.4 percent (±0.5%) to +0.9 percent (±0.4%).

Retail trade sales were up 0.6 percent (±0.5%) from March 2011, and 7.9 percent (±0.7%) above last year. Gasoline stations sales were up 21.8 percent (±1.7%) from April 2010 and nonstore retailers sales were up 15.5 percent (±3.1%) from last year.

What to focus on is that sales are up 7.8% unadjusted (versus 7.6% seasonally adjusted).  The CPI released tomorrow will be in the range of 3%, imported items are up 11%, and the PPI is up 6.8%.  None of these price indices are specifically applicable to retail sales – but it is safe to say that inflation is accounting for at least half of the increase.

Another factor dragging on this increase is Easter.  Easter this year was in April – last year in March.

Interesting tidbits from this month’s data:

  • Gasoline sales were up 17% YoY on declining volume.  Gasoline sales account for 11% to 12% of retail sales.
  • Increases in gasoline, autos and online stores account for all the gain.  This is not good news for brick and mortar retailers.

As energy prices appear to be moderating based on the current spot prices, the reason this retail sales data does not stand up well to scrutiny may become less of a factor in the months to come.

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