Jack Dunn - Reclaiming Common Sense

The monthly retail sales report (MARTS) reveals changes in spending patterns across numerous categories. The data that is reported elsewhere is the seasonally adjusted data. The seasonal factors used to convert non-seasonally adjusted data to seasonally adjusted data changes by category, month, and year. Another way to look at the data is the current year data - comparing the first six month of this year to the first six months of last year, or the rolling year data, the sales in a particular category over the past twelve months.  Electronics and Appliances continue to lag in sales. The largest current year growth is in Food and Drinking Places, Non-store retail, and Gasoline Stations. The data is also indicating that we really need to be paying attention to the non-store data when discussing the retail market. This column has produced an article explaining why this is not a Retail Ice Age - It may be a Retail Winter - and by the way, It is officially Summer.

Retail Sales Dropped in eleven sectors last month  - This appear to be called the month after Memorial Day Weekend.  The data looks terrible until you realize that sales drop during the month of June. May has Memorial Day. July has the fourth of July Week(end.) The month to month data was okay. The June to June growth shows a similar pattern.  The eye opener is the growth in Non-Store Retail and Building Material Sales.

Current Year Sales are up for the Retail Market as a whole. No matter what you hear about the "Retail Ice Age," retail sales are up, as a whole, year over year, after six months of sales. Brick and Mortar may be lagging. This could be the "Amazon effect." It could also just be a new way of doing business. Remember the "Sears Catalog?" It was "everybody's second phone book. You don't remember the White Pages? My point is that first came the Sears catalog, then came the cornucopia of catalogs in the mail, then came the Internet and ordering on line. Amazon has been doing it better lately.

Rolling Year Data is showing some improvement in categories and a dramatic shift downward in others. Electronics and Appliances Retail Sales have been sluggish, at best, and worsening, at worst. This column has commented in prior MARTS articles that when new home sales return to normal we will see the Electronics and Appliance Sector kick off to a roaring pace of sales. There was some data on this tweeted out yesterday.

The Retail Sales for April and May were revised higher than their "Preliminary" and Advance values that were reported last month. A billion here and a billion there and eventually you are talking about "real money." The April data was revised up by over 900 million dollars. The May data was revised higher by over a billion dollars. There is a reason why we are doing better this year than we ever had done, with regard to retail sales.

Total retail spendning is up. Some sectors are doing better than others. Some sectors have not recovered to pre-recession levels. Some of this could be a lack of disposable income. Some of this could be due to the "Amazon effect" where sales that would have been made at "bricks and mortar" stores are now being done on-line through non-store retail. Some sectors have not recovered to pre-recession levels because housing sales, especially new home sales, have not returned to pre-recession levels. The stock market is rising because merchandise sellers are selling more merchandise - their profits may rise as more sales are done on-line.

It's the economy.