The Census Bureau’s Advance Retail Sales Report for December released this morning showed an increase over the November figures.

 

By Jill Mislinski

 

Headline sales came in at 0.4% month-over-month to one decimal. Today’s headline number was at the Investing.com consensus of 0.4%. Core sales (ex Autos) came in at 0.4% MoM. October and November figures were revised.

Here is the introduction from today’s report:

Advance estimates of U.S. retail and food services sales for December 2017, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $495.4 billion, an increase of 0.4 percent (±0.5 percent)* from the previous month, and 5.4 percent (±0.7 percent) above December 2016. Total sales for the 12 months of 2017 were up 4.2 percent (±0.4 percent) from 2016. Total sales for the October 2017 through December 2017 period were up 5.5 percent (±0.5 percent) from the same period a year ago. The October 2017 to November 2017 percent change was revised from up 0.8 percent (±0.5 percent) to up 0.9 percent (±0.2 percent).

Retail trade sales were up 0.3 percent (±0.5 percent)* from November 2017, and were up 5.6 percent (±0.7 percent) from last year. Nonstore Retailers were up 12.7 percent (±1.4 percent) from December 2016, while Building Materials and Garden Equipment and Supplies Dealers were up 9.9 percent (±2.1 percent) from last year. [view full report]

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.

Retail Sales Trends

The year-over-year percent change provides another perspective on the historical trend. Here is the headline series.

Retail Sales YoY

Core Sales

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

Core Retail Sales YoY

“Control” Purchases

The next two charts illustrate retail sales(NYSEARCA:XLY) “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. The popular financial press typically ignores this series, but it a more consistent and reliable reading of the economy.

Control Sales Trends

Here is the same series year-over-year. Note that the current level is above both highlighted values at the start of recessions since the inception of this series in the early 1990s.

Control Sales YoY

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

Headline and Control YoY

Bottom Line: December sales showed an improvement over the previous month’s figures and were at forecasts. Later today we’ll take a closer look at Real Retail Sales.