The US Census Bureau’s retail sales figures are based on a random sampling survey of approximately 5,000 retail and food services firms whose sales are then weighted to represent the complete universe of over three million businesses. Responding firms account for approximately 65 percent of the dollar volume estimate. The statistic is an advance measure of overall retail sales, and is important for those interested in the demand side of the economy.
The U.S. Census Bureau seasonally adjusted estimates of U.S. retail and food services sales for June were $439.9 billion, an increase of 0.2 percent from the previous month, and 4.3 percent above June 2013. This is consistent with overall growth in retail sales for the year, and suggests that demand is growing at about 2.5 percent above reported inflation.
Year over year growth has been largest for non-store retailers (or internet and catalogue sales) which are up by 8.1 percent over the first 6 months in 2013, followed by drug stores (up by 7.9 percent) and car dealers which were up by 7.0 percent. This reflects what has been reported in the news and in other economics statistics in that automotive sales are up substantially as are prices for pharmaceuticals and other health care products. Retailers seeing year over year declines included department stores (off by 1.1 percent), electronics and appliance stores (down 0.6 percent) and hobby and toy stores, and clothing stores each of which were off by half a percent. Since these data are not adjusted for prices, the declines in clothing store and appliance store sales may represent pricing reductions rather than physical sales, but the overall softness in home goods, furniture and appliance sales belies the issue of a housing bubble. If new home sales are rising faster than furniture sales it suggests that many dwellings are being purchased for speculative purposes which is exactly what happened during the period prior to the 2007 bust in the housing bubble.
While extremely important for many mainstream economists, the retail sales figures say little about production or whether the overall economy is strengthening. They do suggest that American’s continue to shop – though their focus seems to be gravitating toward general staples like food (which of course is good for grocers). Also, the growth in internet sales continues unabated at the cost of full-priced retailers like department stores, and electronics box merchants.
Again, the disconnect between furniture and appliance sales and home sales raises concerns particularly since the interest rates are being kept at artificially low levels to encourage speculative home purchases.
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