Following May's bounce in retail sales (thanks to a rise in gas prices), June's headline data printed a 0.3% plunge - the most since Feb 2015 - against expectations of a 0.3% rise. Retail Sales ex-Autos also fell MoM (down 0.1% against expectations of a 0.5% rise). This is exactly in line with our warnings last week that spending was likely to drop following a slide in credit and debit card spending as retail sales declined in autos; furniture; building materials; clothing; general merchandise; restaurants; online and miscellaneous. The control grouop data showed a mere 2.1% rise YoY - confirming recessionary signals from wholesale sales data.
Last week we reported Bank of America's internal card data revealed that after rising for 3 consecutive months, retail spending ex autos just posted its first monthly drop, declining -0.1% from May. Based on BAC internal data, which tracks aggregate spending on credit and debit cards, retail sales ex-autos declined 0.1% mom in June on a seasonally adjusted basis. This follows a strong 0.8% gain in May.
Moments ago the Dept of Commerce confirmed that this preview was absolutely correct:
Here is BofA's less than exuberant narrative...
"It is hard to prove if such a distortion exists. Therefore, we are left to conclude that the BAC internal data painted a disappointing picture of the consumer in June, especially considering our forecast for a stronger consumer in the second half of the year."