April Retail Sales: The Spring Rebound Goes Missing

May 13, 2015

by Doug Short

The Advance Retail Sales Report released this morning shows that sales in April came in flat month-over-month, a situation that was enabled by an upward March revision from 0.9% to 1.1%. Core Retail Sales (ex Autos) came in at a disappointing 0.1%, with the March number tweaked upward from 0.4% to 0.7%.

Today's numbers came in below the Investing.com forecast of 0.2% for Headline Sales and 0.5% for Core Sales.

The mainstream expectation of spring bounce in sales after a severe winter hasn't happened.

The chart below is a log-scale snapshot of retail sales since the early 1990s. The two exponential regressions through the data help us to evaluate the long-term trend of this key economic indicator.

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The year-over-year percent change provides another perspective on the historical trend. 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 two charts illustrate 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.

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Here is the same series year-over-year. 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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Bottom Line: The Advance Retail Sales for April were disappointing across the board. They suggest that the consumer economy is approaching stall speed.

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