Retail Sales & Inventories - June 2009

June 2009 retail sales data:

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for June, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $342.1 billion, an increase of 0.6 percent (±0.5%) from the previous month, but 9.0 percent (±0.7%) below June 2008. Total sales for the April through June 2009 period were down 9.6 percent (±0.5%) from the same period a year ago. The April to May 2009 percent change was unrevised from 0.5 percent (±0.3%).

retail sales comparison of may vs. june 2009

Gasoline sales are down 33% from the previous year, but recall that was hitting $5 dollar gas and now gas sales are up 5% since May 2009. Autos recovered slightly, still down ~20% from a year ago.

I think Bloomberg gets these numbers right after reviewing the actual data in the report above.

Surging gasoline costs spurred gains in U.S. retail sales and wholesale prices in June, while a drop in spending outside of auto dealers and service stations reinforced concern an economic recovery will be limited.

Sales at retailers rose 0.6 percent from May, more than forecast and the biggest gain since January, Commerce Department figures showed today in Washington. Excluding autos and gas, purchases dropped for a fourth consecutive month. The Labor Department’s producer-price index gained 1.8 percent, twice as much as anticipated.

Today’s figures indicate that consumer spending likely fell last quarter, with little momentum heading into the latter part of the year. Job losses and declining home values are weighing on households, leaving them with little appetite to spend more, other than on necessities or at discount chains such as TJX Cos. and 99 Cents Only Stores.

“Consumers aren’t prepared to spend” and that “means a very lame recovery,” said Brian Bethune, chief U.S. financial economist at IHS Global Insight in Lexington, Massachusetts. “The immediate threat of inflation is nil. Price pressures really aren’t there.”

Calculated Risk noticed immediately that while inventories are down, so are sales. Usually when inventories decrease this is an indicator of economic recovery, yet when matched with declining sales it might reflect more of a shrinking sector.

There has been a race between declining sales and declining inventory. Even as sales start to stabilize (appears to be happening), inventory levels are still too high compared to the lower sales levels, and further inventory reductions are probably coming.

Also, the MCSI, or Consumer Sentiment index was down in July, preliminary readings. 64.6, down from 70.8 just one month ago. The low in March 2009 was 57.3.

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