Retail Sales Miss For Third Month In A Row, Worst Print Since January

Tyler Durden's picture

But the talking heads said that the consumer is back and jobs are soaring? Retail sales missed expectations for the 3rd month in a row (after the weather rebound was supposed to kick in?) with an unchanged 0.0% print in July (against expectations of a 0.2% rise). This is dramaticaly off the 1.5% growth rate seen in March. Across the board, retail sales were weak with Ex Auto & Gas up only 0.1% against expectations of a 0.4% gain. Department Store sales fell 0.7% MoM. So much for pent-up demand.

So - let us get this straight - Q1 was a disaster because of the weather (but retail sales surged and beat expectations in every month) and Q2 was the pent-up demand rebound and retail sales missed every month and slipped to six month lows.


Here is the breakdown by July retail sales components:


The weakness was particularly pronounced in Department Stores, which dropped -0.7% sequentially:


And the reason why Q3 GDP is about to be revised lower by the Penguin brigade: the retail sales control group posted a tiny 0.1% increase over June, the lowest increase since January when we saw the worst tied plunge since Lehman.


And while "harsh weather" was the spin for weak H1 retail sales, now it is the lack of wage growth's fault, or precisely what we have been saying all along. From Bloomberg:

Retail sales were little changed in July, the worst performance in six months, as car demand slowed and tepid wage growth restrained U.S. consumers.


The slowdown in purchases followed a 0.2 percent advance in June, the Commerce Department reported today in Washington. The median forecast of 82 economists surveyed by Bloomberg called for a 0.2 percent gain. Excluding (RSTAXMOM) cars, sales rose 0.1 percent.


Job growth has yet to stoke the type of wage gains needed to boost household purchases, a sign the economic expansion will probably not sustain the second-quarter pickup into the end of the year. Some retailers must rely on promotions and discounts to entice customers, whose spending accounts for about 70 percent of the economy.


“We’re seeing decent but not great consumer spending,” Christopher Low, chief economist at FTN Financial in New York, said before the report. “Credit is limited and wage growth is stagnant.”


Nonetheless, inflation-adjusted average weekly earnings dropped 0.2 percent in the 12 months through June, the worst performance since October 2012, according to Labor Department data.


Among retailers, auto dealers have benefited from pent-up demand and easy access to credit, with car and truck sales up 6 percent in July from the same month in 2013, today’s Commerce data showed. Purchases cooled last month, falling 0.2 percent from June. At the same time, vehicle sales are on track for their best year since 2006.


Discounts and promotions remain popular. Tanger Factory Outlet Centers Inc. (SKT), based in Greensboro, North Carolina, reports 98 percent occupancy at its discount shopping malls and tenants want to expand their offerings, President and Chief Executive Officer Steven Tanger said.


“The great majority of them are looking to grow their businesses,” Tanger said on an Aug. 6 earnings call. “They tell us they’re allocating more capital to the outlet distribution channel than other distribution channels. So we’re excited about the demand for our properties.”

And since the MSM is finally figuring it out, here is the next punchline: as long as central banks are around there will be no wage growth. We give the MSM the usual 2-4 years before they grasp this final piece of the puzzle.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Groundhog Day's picture

it must have been the warm weather

fonzannoon's picture

It did rain a lot here overnight. There was no way I was going shopping last night. I may go out this morning. Will have to see....

wallstreetaposteriori's picture

so much for that infinite weather bounce.

power steering's picture

Pretty sure fruit bat sales are down for reasons other than weather. Sheesh

knukles's picture

Ha ha ha ha ha ha
Plentiful Propaganda and Infinite Money..... Yet nothing works.

Seems Stanly Fischer was thinking in the right direction.  Something terribly wrong.

Shop you fuckers!

espirit's picture

Lest anyone be monkeyhammered enough to wake-the-fuck-up.


Son of Loki's picture

e-commerce web sites report sellers complaining of a 30-40% y-o-y drop in sales.

Causes cited:

1. flood of fake and/or cheap stuff now sold in the USA online (even on Ebay and Amazon) from China;

2. broke consumers;

3. internet sales tax; and,

4.high postal rates (which will probably be hiked again this year).


Outlook: "dismal to bleak."

WarHorse's picture

Damn ... with all the "good news" last week I moved my 401(k) to cash.  With this "bad news" news I will leave money on the table ..... SUCK IT YELLEN

SoberOne's picture

EBT, EBT I just swipe my EBT...

MountainsRoam's picture

Never fear, the Q3 GDP will be 4.6%, cause they said so..

KnuckleDragger-X's picture

Yep, recovery summer and pent up demend will fix everything...

Cattender's picture

i stopped at walmart last night after work.. WOW Was it Dead in there.. spooky.

IronShield's picture

But the stores in my neighborhood are full!

Sure, they are all wearing bandanas on their face but isn't that Bullish?

Hippocratic Oaf's picture

Coming soon to a mall near you


order66's picture

Down goes Consumer! Down goes Consumer!

Tjeff1's picture

Big will be inventories at 10 am.

Tjeff1's picture

In ferguson, its not a sale unless you pay for it.

Squid Viscous's picture

wow shaved a whole point off the futures, BTFD!

Tjeff1's picture

Macy's missed too.  Middle income getting hit.

JRobby's picture


It's crushed. Debt back to all time high.

GetZeeGold's picture



People with 29.5 hr/wk jobs usually skip shopping at Macy's.


Maybe ICE could take the new illegal alien children school shopping at Macy's.....perhaps a tad bit of relief?

knukles's picture

Real after tax disposable income down what was it, 20%+ since 2008?

Squid Viscous's picture

at least sea world is getting clobbered, so there is some karma left in the universe...

pupdog1's picture

...and, people figured out that Macy's previously carefully selected decent quality merchandise is now Chinese junk--at the same prices.

Osmium's picture

Thank god the only time I ever go to Macy's is when the old ball and chain makes me take her to the spring flower show.

B2u's picture

then over on MarketWatch people are more interested in what Rush Limbaugh said about Robin Williams.  What the hell does that have to do with the economy?

Eyeroller's picture

Nothing to do with economy, but everything to do with what the mouth-breathers care about.

Iraq, Ukraine, and Gaza all pushed out of headlines with death of Robin Williams.

knukles's picture

Keep the mind focused on the irrelevant.
All's well, bitchez.

Look, Kim Kardashian's left tit.  Yoo hoo! Ms Kardashian! You dropped your titty...

Ness.'s picture

Titty is a funny word.  I think I'll buy some stocks.


Yeah titties!!!

Hippocratic Oaf's picture

Her tits have to be huge to counter-weight dat ass!!

Any ass you can set a drink on while standing up is too big IMO

dobermangang's picture

Only things selling well now are: Ammo, handguns, all guns near St. Louis, going out of business signs, office space available signs, lotto scratch-offs and Robin Williams movie DVDs.

corporatewhore's picture

add to the list: airplane shots

ekm1's picture







Profit must always be >0, otherwise output shuts down


End of Lecture

fonzannoon's picture

I totally picture you standing on the street doing this to people as they walk by.

ekm1's picture

:-) Right on Bay Street, Toronto Downtown, in front of TSX

Eyeroller's picture



Every pullback will not be allowed to go past 4%, so BTFD because the Fed always has your back.


End of lecture.

ekm1's picture

If you ever read my comments, I do not rule out Dow at 20k, next week and 30k next month, 40k the other month and 50k in december.


Just type up digits on computers. No biggie, until wolrd dumps USD in its entirety

AssFire's picture

ekm ruled out Dow at 20k and even picked the crash based on petroleum war...ekm1 is wiser and now knows the can kicking can and will last much longer.

(Can't blame you, I thought it was due to happen any day for 6 years now)

ekm1's picture

Hey, hello there.

My forecasts were made in May 2013.


I still stand by oil as low as $20 very soon, or world dumps USD totally


I never ruled out dow at 20k. I always said that the "market" is dead and means nothing.

AssFire's picture

Remember I am in Texas where we are producing more than at any time in history, yet the price remains manipulated against deflation (like everything everywhere). No argument here- just thought the Dow was at about 15k when you called the collapse.

ekm1's picture

Oh, the oil industry toolmaker.

Yes, I do remember very well.

Iam_Silverman's picture

The perspecitve from the power generation industry shows all cylinders hitting too.  We are constantly running at full capacity here.  Someone is sure sucking down the power.  Have they moved HAARP south?

KnuckleDragger-X's picture

With the shutdown of coal generators y'all will have plenty of demand...

ekm1's picture

What I always said is that any point above 11k for Dow is totally useles. Just numbers on computers.


Whether it's 15k or 20k or 25k, it makes no difference

ejmoosa's picture

Economic expanison requires profit expansion...


Just having profits >0 is not sufficient.

Iam_Silverman's picture


Profit must always be >0, otherwise output shuts down"


Ahh, so true - except when you use the new, patented "Amazon Correction Factor", which magically converts any number below zero to an absolute value due to....VOLUME!

DaMule's picture

OMG, a polar vortex is predicted to hit in September!! What happens then???

knukles's picture

I'll have to wear a sweater?