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Retail Sales  
Released On 11/15/2018 8:30:00 AM For Oct, 2018
PriorPrior RevisedConsensusConsensus RangeActual
Retail Sales - M/M change0.1 %-0.1 %0.5 %0.3 % to 0.7 %0.8 %
Retail Sales less autos - M/M change-0.1 %0.5 %0.3 % to 0.7 %0.7 %
Less Autos & Gas - M/M Change0.0 %0.4 %0.2 % to 0.5 %0.3 %
Control Group – M/M change0.5 %0.3 %0.3 %0.2 % to 0.4 %0.3 %

Highlights
The first hard indication on what to expect for fourth-quarter consumer spending is positive but not as enormously positive as October's 0.8 percent headline surge in retail sales would suggest. Control group sales, which importantly are inputs into personal consumption expenditures and which exclude categories that were especially strong in October, rose a more moderate 0.3 percent with September for this reading revised 2 tenths lower to also a 0.3 percent gain.

Control group sales exclude autos which were very strong in October, rising 1.1 percent following several months of weakness. Sales for the control group also exclude building materials which surged nearly as much as autos, up 1.0 percent in what is a good indication for residential investment. Gasoline is also not included in the control group and here sales jumped 3.5 percent in the month though this reading for November is very likely to reverse given the ongoing decline in the price of oil.

Showing an outright decline in October are restaurant sales, down 0.2 percent which follow 1.5 and 0.1 percent declines in the two prior months. Restaurants had been a leading force for retail sales and the recent reversals hint at an ebbing in consumer enthusiasm. Furniture sales, in contrast to building materials, also fell in the month posting a 0.3 percent decline.

Yet October's report is definitely positive with solid gains of 0.5 percent for general merchandise that includes a very welcome 0.5 percent gain for the department store subcomponent in what represents a solid bounce following unchanged readings in the prior two months. Nonstore retailers, which track e-commerce, posted a useful 0.4 percent rise which, however, is a bit subpar for this reading.

October is the last month before Christmas shopping takes hold and the initial indication for holiday spending is healthy but not extravagant. Revisions for September were generally not favorable with overall sales now at minus 0.1 percent vs an initial 0.1 percent. The downward revision to September control group sales may trim back revision estimates slightly for third-quarter GDP.

Consensus Outlook
A solid 0.5 percent increase is the forecast for October retail sales which proved flat in both September and August at only 0.1 percent gains. But there has been underlying strength in this report as control group sales, which exclude autos, restaurants, gasoline, and building materials, have been very solid and posted a 0.5 percent rise in September. October's call for control group sales, which are inputs into personal consumption expenditures, are a 0.3 percent gain. Excluding autos, a gain of 0.5 percent is the call that reflects flat October results for unit vehicle sales with a 0.4 percent increase seen for ex-auto ex-gas sales.

Definition
Retail sales measure the total receipts at stores that sell merchandise and related services to final consumers. Sales are by retail and food services stores. Data are collected from the Monthly Retail Trade Survey conducted by the U.S. Bureau of the Census. Essentially, retail sales cover the durables and nondurables portions of consumer spending. Consumer spending typically accounts for about two-thirds of GDP and is therefore a key element in economic growth.  Why Investors Care
 
[Chart]
Nearly 75 percent of the time, changes in monthly retail sales are between +1 percent and -1 percent. However, there are many months in which the monthly change falls outside that range. Most of the time, excessive increases or decreases are due to higher/lower spending on motor vehicle sales. Year-over-year changes in retail sales can be volatile as well, but tend to be smoother than monthly changes.
Data Source: Haver Analytics
 
 

2018 Release Schedule
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