Broad Based Improvements Lead Retail Sales Higher

by devteam September 15th, 2009 | Share

Retail sales were much better than forecasts in August, boosted by gains in the auto sector but helped by broad advances too.

The headline index climbed 2.7% in August, easily beating predictions for a 2.0% figure.

“The upward momentum in retail sales in August was not merely a ‘cash-for-clunkers’ or higher gas price phenomenon,” said analysts at RDQ.

The cash-for-clunkers program helped sales at motor vehicles & parts dealers drive 10.6% in the month, compared with a 1.5% increase in the prior month.

Economists were expecting the rest of the report to be weak, but aside from declines in furniture sales (-1.6%) and building materials (-1.2%), all other categories reported advances. With autos excluded, sales jumped 1.1% on the month, almost tripling forecasts looking for a 0.4% gain.

  • Electronics & Appliances: +1.1%
  • Food & Beverage stores: +0.5%
  • Health & Personal care stores: +0.4%
  • Gasoline stations: +5.1%
  • Clothing stores: +2.4%
  • Sporting goods, hobby, book and music stores: +2.3%
  • General merchandise: +1.6%
  • Miscellaneous: +0.2%

“By itself, the August retail sales report points to 5% current quarter real GDP growth,” said Joseph LaVorgna, chief US economist at Deutsche Bank, who said further data is needed for confirmation, but in the meantime he is pencilling in a 4% gain in Q3 GDP.

Despite the monthly advance, total retail sales remain down 5.3% compared to 12 months ago, while retail sales excluding autos are down 6.2%. The annual declines are greatest for gasoline stations sales, which have fallen 26.7% from August 2008. Building material & supplies dealers are down a significant 13.6% from last year. 

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About the Author


Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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