Reclaiming Common Sense

The non-seasonally adjusted drop in month to month sales will be reported as month to month MARTS Gains this April in all but one or two sectors


 The April Retail Forecast article projected that non-seasonally adjusted April to April growth would be recorded in all sectors except General Merchandise and Sporting Goods, Hobbies, Books and Music (SGHBM.) It is April so month to month NSA sales were expected to contract in all but Building Materials and Garden Equipment (BMGE) and Gasoline Station Sales. The headline seasonally adjusted (SA) retail growth was expected to be reported in all sectors month to month except SGHBM and possibly Furniture and Furnishings (F/F) sales. The April to April growth was expected to be reported in all sectors except SGHBM. What was recorded and what was reported?


The consumer is getting healthier in the United States. Full-time jobs were at a record high for April, after being at a March record high, and a February record high. More money should mean more retail sales. Higher wages should also help boost sales.


We recorded non-seasonally adjusted (NSA) annual, same month, growth in all sectors except F/F, EAS, and SGHBM. Annual growth was expected in all sectors except Sporting Goods, Hobbies, Books and Music (SGHBM) and Miscellaneous Sales.It is not surprising to see the drop in EAS and F/F because we have had a slow star for existing home sales. Same month sales dropped from $9.527 billion to $9.462 billion for F/F, from $7.090B to $6.849B for EAS, and from $6.159B to $5.872B for SGHBM. The same month growth was largest for Non-Store Retail (11.85%,) Health and Personal Care (HPC) at 6.10%, 5.80% for Gasoline Stations, 5.08% for Food Service Drinking Places (FSDP) and 4.55% for Food and Beverage Stores (FBS.) (Table can be found here.)


We recorded month to month NSA decline is all sectors except _BMGE, GASS, and Miscellaneous Sales .  Month to Month, non-seasonally adjusted sales, were expected to fall in all but two sectors, Building materials and Garden Equipment and Gas Station Sales.


The Rolling Year and Current Year data came in higher than expected. The rolling year (RY) growth, the total sales during the past 12 months, rose from 4.29% during March to 4.40% during April. The current year (CY) growth, January through April, is up from the same period last year, from 2.31% to 2.99%. Normally when the CY rate is lower than the RY data this indicates a slowing in whatever is being measured. Same month growth came in at 4.97%, up dramatically from the 1.64% during March. When the same month growth is faster than the CY rate then the thing you are measuring is growing. One month is not a trend. That said, the RY growth rate is better than the April RY growth rates during 2013-2017.


Seasonally adjusted, April to April, same month sales Increased for MVP, BMGE, Health and Personal Care (HPC,) and Non-Store Retail (NSR.) There were declines in F/F, EAS, SGHBM, and Miscellaneous Sales. The largest percentage growth April to April was expected in F/F, Clothing and Clothing Accessories (CAC,) Non-store Retail (NSR,)Motor Vehicle and Parts (MVP,)  as well as food and drinking places (FDP,) and Food and Beverage Stores (FBS.) The data is not reflective of what was experienced April to April non-seasonally adjusted.

Seasonally adjusted Month to Month sales rose for FBS, Gas, SGHBM, and General Merchandise.
All sectors were expected to grow month to month, seasonally adjusted, other than SGHBM. The Devil is in the data.


Rolling Year and Current Year data were reported at 4.34% and 3.09%, seasonally adjusted. The RY growth was a drop from 4.48% to 4.34% even as the NSA RY jumped. The CY growth was virtually unchanged from 3.08%, coming in at 3.09%. The same month growth was only 3.13%, down from 3.64% last month. (Data and Tables can be found here.)


There are some who believe that Retail sales are 70% of GDP. Throat may have been true under the Obama Economy. It was not so during the first quarter of this year. The economy was firing on all cylinders during the first quarter with Personal Consumption Expenditures (PCE,) Gross Private Domestic Investments (GPDI,) Government Consumption Expenditures (GCE,) and Net Exports all adding the the Quarter to Quarter and Same Quarter Growth Rates. The contributions to quarter to quarter growth were 0.82% PCE, 0.92% GPDI, 1.03% Net Exports, and 0.41% GCE. This means that PCE was only approximately 25% of GDP, not 70%.


The non-seasonally adjusted retail sales data recorded a decline month to month and an increase April to April as expected. The non-seasonally adjusted same month growth was 4.97% up from 1.64% last month. Rolling Year growth was up from 4.29% to 4.40%. Current year sales grew at 2.99% this month compared to 2.31% last month. This is not what was reported elsewhere, or even in the report. Recorded versus Reported matters. This was not a stellar report. It was a good report. We will have to watch the current month growth, current year growth, and rolling year growth closely during the next few months. This may have been a blip or a course correction back to 5% annual growth.


It's the economy.