Retail Sales Data Look Far Better on Annual Gains Than Monthly Gains

Retail sales posted a small gain in October’s monthly readings but looked solid on the year-over-year readings. This appears to be setting a path that will support another solid holiday spending season in 2019, but the question that always persists is just how strong those gains will really turn out.

The headline report showed that retail sales rose by 0.3% to $526.5 billion in October and retail sales excluding autos rose by 0.2%. Year over year, the headline retail sales were up by 3.1%, and retail trade sales were counted as being up by 2.9% from a year earlier.

Econoday was calling for just a 0.2% gain on the monthly headline number, but it was looking for a 0.4% gain on the ex-autos number. After backing out gas and related spending, retail sales were up just 0.1%. The so-called control group that factors into gross domestic product were up 0.3% in October as well. As a reminder, close to 70% of GDP is now tied to consumer spending activities.

Nonstore retailers (e-commerce and catalogs) saw a gain of 14.3% from October of 2018 to a level of $67.91 billion. Gasoline stations saw a drop of 5% from a year earlier, but the range of gas prices was $2.91 to $2.77 per gallon (on average nationally) in October of 2018, versus $2.61 to $2.68 in October of 2019, according to GasBuddy charts.

There is also a look at which areas of the retail climate are seeing lower sales volume. Consumers appear to be spending less on clothing and furniture. Sales at clothing stores were down 1%, and furniture stores reported a drop of 0.9% in October. Sales of sporting goods were down 0.8%, and sales of electronics and appliances were down by 0.4%. There was also a 0.3% monthly drop in restaurant sales to $65.32 billion (food service and drinking places) on the monthly reading, but that was still up almost 4.7% from a year ago.

Some retail operations are impossible to phase out, and some transactions are of course counted as in-store transactions. That said, retail spending online and in non-store formats represented about 12.9% of all retail sales in the month of October.