Retail sales were thoroughly disappointing in June. Whereas other accounts such as imports or durable goods had at least delivered a split decision between adjusted and unadjusted versions, for retail sales both views of them were ugly. Seasonally-adjusted first, spending last month was down for the second straight time. Worse than that, estimated sales were just barely more than in January. The economy in 2017 is not following up on even the meek promise of late 2016.
Unadjusted, retail sales in June 2017 were only 3.24% above retail sales in June 2016. Well more than a year after the (supposed) end of the “rising dollar” downturn, retail sales still display this tendency of being way down too close to the 3% recession level. In an actually strong economy, such monthly variation would still be in order but it would go to the high side, an occasional month in double digits. Retail sales can’t even manage to reach 6% once, going back now five years, which used to be a minimum standard for expansion.
The lack of acceleration and momentum suggests, as with other economic accounts, this “reflation” or mini-cycle could already be topping out. That it may be doing so right around 2014 levels is the least surprising development; “dollar”, downturn, partial rebound. Rinse. Repeat.
In what were before genuine areas of strength, there are more and more only questions. The blistering pace of Non-store retail sales has not disappeared entirely, for one, but it has noticeably cooled this year. While still rising at a faster rate than in recent years, mostly online sales aren’t as robust as they were in the second half of 2016. Since those sales were not transferred to another segment, back to “brick and mortar” stores, for example, it has for whatever reason taken back some of the marginal improvement.
