Must-know: US Census Bureau’s monthly retail sales report

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Sep. 10 2014, Updated 9:00 a.m. ET

U.S. Census Bureau release—monthly retail sales for August

This week, three major retail reports will be released. The U.S. Census Bureau will report monthly retail sales for August on Friday, September 12. The weekly ICSC-Goldman Same Store Sales and the Johnson Redbook indices will release on Tuesday, September 9. You’ll read about monthly retail sales in this part of the series. The next part will discuss the weekly sales indices.

Retail sales, excluding food services, make up ~27% of the total U.S. gross domestic product (or GDP). Retail sales are an important economic growth driver. An uptick in retail sales usually means upside for broad-based equity markets like the S&P 500 Index (SPY) (IVV).

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Retail sales are also a sign of economic confidence. Consumers tend to spend more when they’re confident about their economic prospects. This tends to benefit consumer discretionary sector exchange-traded funds (or ETFs) like the State Street SPDR S&P Retail ETF (XRT) and the State Street Consumer Discretionary Select Sector SPDR (XLY). XLY and XRT include retailers like Amazon (AMZN), The Gap (or GPS), Kohl’s (or KSS), and Macy’s (or M).

Highlights from last month’s report

  • Advance U.S. retail sales for July came in at ~$439.8 billion—almost flat compared to June, but up 3.7% from July 2013.
  • Segments reporting the highest monthly percentage increases included miscellaneous store retailers at 0.9%, health and personal care stores at 0.4%, and food and beverage stores at 0.3%.
  • Segments reporting the highest monthly percentage decreases included motor vehicle and parts dealers at -0.2% and general merchandise stores at -0.5%. Motor vehicle sales reported the second consecutive monthly decline. Excluding motor vehicle sales, retail sales were up by 0.1% month-over-month.

Outlook

The August retail sales figure is expected to show a 0.6% month-over-month increase. The report should be boosted by auto sales. Auto sales were surprisingly strong in August. Motor vehicle sales increased 6.4% and 9.9%, month-over-month and year-over-year (or YoY), respectively. Retail sales, notably apparel and general merchandise stores, should also get a lift from back-to-school shopping in August.

In the next part in the series, we’ll discuss the results of the weekly retail reports—ICSC-Goldman Same Store Sales and the Johnson Redbook indices.

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