The Commerce Department’s retail sales figures came in relatively decent, with total retail sales coming in up 0.1 percent at $419 billion. The second most quoted figure related to the monthly retail sales report is retail sales less the automobile sector, and this indicator coming in down 0.1 percent over the prior month, or $340 billion.
Retail Sales Figures Encouraging?
The market generally considered the today’s retail sales figures as encouraging, in that the 0.1 percent growth beat economists’ expectations of -0.3 percent. The positive month over month growth also represents a movement in the opposite direction from the retail sales figure of the prior month, which was down 0.5 percent.
What do today’s April’s retail sales figures mean in perspective?
Well, in the context of the recent almost two year deceleration trend, today’s figures represent a reversal. The year over year growth rate reached a recent high at 9.21 percent in June 2011. Since then, the year over year growth rate has declined to today’s figure of 3.65 percent.
Is April’s retail sales figure uptick to 3.65 percent something more than statistical noise in what appears to be a downward trajectory?
Here’s a longer historical time series to answer this question.
In the retail sales figures, has it happened before where retail sales have been on a downward trajectory for almost two years and then reverse direction before turning to negative territory and stay in positive territory?
Yes. the late 1970s and early 1980s saw it happen, as did the late 1960s, early 1970s, and late 1990s.
In fact, more often than not a deceleration phase (the current trend) is followed by a re-acceleration in growth rather than negative growth. Of course, the two most recent recessions give the opposite conclusion, with retail sales turning negative briefly in 2001 and 2002, and retail sales turning sub-zero south for a prolonged period in 2008 and 2009.
Are we in the 1970s/1980s, or are we in the 2000s? Within the next couple of months, we’ll get a clearer picture (although still blurry).