Core Retail Sales Tumble Most Since January

Despite this week's Macy's-driven retail sales exuberance - following BofA's suggestion that all was not well - the official retail sales print shows July was ugly... Retail Sales (ex Autos/Gas) fell 0.1% MoM (missing expectations of +0.3%) to the weakest since January. The headline data was flat MoM (dramatically missing the +0.4% expectations). The drop was driven by weakness in gas station and sporting goods sales (along with department stores... apart from Macy's?). Perhaps most worrying hjowever is the mere 2.3% YoY growth in headline retail sales - a level that has signaled recessionary conditions in the past.

Core Retail Sales monthly changes are volatile to say the least...

 

YoY growth in retail sales slowed to just 2.3% - indicative of recessionary levels...

 

Breaking the data down shows weaknes in gas stations, sporting goods, and department stores...

 

 

BofA was right after all...

Looking at the full year, BofA finds that retail sales ex-autos are only up 0.7% yoy, and points out that Census Bureau data have closely followed the trend in the BAC data, suggesting that the market should prepare for either a downward revision to the June data and/or disappointing July figures: "In our view, this sets up for a softer Census Bureau retail sales report on  Friday – we would not be surprised to see either disappointing July sales and/or a downward revision to June."

 

Given that BofA's internal credit card data appears indicative of overall spending trends, judging by a very disappointing retail spending report. It's difficult to square such disappointment with the recent GDP data which shows that only the "strong" consumer is keeping the US economy out of recession... 

 

Finally, there's this...