March Retail Sales Bounce Back, But Q1 Ended Down 1.3% Quarter-over-Quarter

April 14, 2015

by Doug Short

The Advance Retail Sales Report released this morning shows that sales in March came in at 0.9% month-over-month, snapping three months of contraction. February sales were revised upward from -0.6% to -0.5%. Core Retail Sales (ex Autos) came in at 0.4%, also snapping a three-month decline.

Today's numbers came in a tad below the Investing.com forecast of 1.0% for Headline Sales and 0.6% for Core Sales.

Even with the bounce, however, total Q1 retail sales show a 1.3% contraction from sales in Q4 2014.

The two charts below are log-scale snapshots of retail sales since the early 1990s. Both include an inset to show the trend over the past 12 months. The one on the left illustrates the "Headline" number. On the right is the "Core" version, which excludes motor vehicles and parts (commonly referred to as "ex autos"). Click on either thumbnail for a larger version.

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The year-over-year percent change provides a better idea of trends. Here is the headline series.

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Here is the year-over-year version of Core Retail Sales.

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Retail Sales: "Control" Purchases

The next chart illustrates retail sales "Control" purchases, which is an even more "Core" view of retail sales. This series excludes Motor Vehicles & Parts, Gasoline, Building Materials as well as Food Services & Drinking Places. Note the highlighted values at the start of the two recessions since the inception of this series in the early 1990s.

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For a better sense of the reduced volatility of the "Control" series, here is a YoY overlay with the headline retail sales.

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Has Savings on Gasoline "Fuel" Non-Gas Spending?

Given the sharp decline in gasoline prices in recent months, we would expect Retail Sales ex Gasoline to look stronger than the headline number, with savings on gas prices increasing other purchases. Indeed March sales, were up 1.0% versus the 0.9% increase in total sales.

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Real Retail Sales: A Preliminary Estimate

After the Consumer Price Index is released, we'll have a more detailed look at retail sales adjusted both for inflation and population growth.

Bottom Line: The Advance Retail Sales for March, both headline and core, broke the recent downtrend, but even with the bounce, Q1 retail sales show a 1.3% contraction from sales in Q4 2014.

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