US Consumers Reeling: Core Retail Sales Post Weakest Growth In Over Three Years

This is not the data the Fed was looking for: after the 4th consecutive miss in CPI data, moments ago the Census Bureau also reported June retail sales which was unexpectedly poor, missing across the board once again, and judging by the surge in bonds, suggests that the Fed's rate hike intentions and narrative is now on indefinite hold.

The details, as shown below, missed in every category:

  • Retail sales down -0.2%, Exp. +0.2% after falling 0.1% in May
  • Retail ex-autos -0.2%, Exp. +0.2%
  • Retail sales ex-autos and gas -0.1%, Exp. 0.4%
  • Retail sales control group -0.1%, Exp. +0.3%

Furthermore, the steep disappoinment in the control group, suggests that Q2 GDP estimates are about to be revised sharply lower.

Putting the weak consumer spending data in context, core retail sales ex auto/gas posted by the lowest annual increase going back to February 2014.

The breakdown: despite a modest rebound in Motor Vehicle Sales (0.1%), Building Material and Garden equipment (0.5%) and Health and Personal care stores (0.3%), and of course the relentless increase in non-store retailers, i.e., internet vendors such as Amazon, which rose 0.4%, the rest declined led by a sharp decline in Miscellaneous store retailers which tumbled -3.1%.

Coupled with the miss in CPI, the USD has taken a plunge and the risk is, as Citi notes, it has more to go. More importantly, the Fed is now in a hole how to explain not only the 4th consecutive CPI miss but also the unexpectedly poor retail sales confirming that US consumers fail to see the so-called economic recovery.

Comments

NoDebt Looney Fri, 07/14/2017 - 09:06 Permalink

This morning I got an email from the place I bought my wife's Jeep a couple years back.  It's titled "These cars must GO!"  It's full of new 2016(!!!) model year cars and trucks (plus a bunch of used vehicles) marked down between $3,000 and $8,000.  There's even a 2017 Ram 1500 Sport marked down more than $10,000.  And so it begins.... 

In reply to by Looney

Katos jamesmmu (not verified) Fri, 07/14/2017 - 10:22 Permalink

Maybe it has something to do with 85 guys owning more money than 3.5 BILLION PEOPLE under THEM. I mean how much shit can 85 guys buy?? As AMERICANS tell each other that they're not worth 15 dollars and hour, most AMERICANS can't afford TWO sticks to run together to start their bar b q? Sorcery ONE can keep on cheerleading for the billionaires as they turn AMERICANS into penniless serfs, WHO will soon  be cannibalizing one another to survive! " MAKE BILLIONAIRES GREAT AGAIN"!

In reply to by jamesmmu (not verified)

yogibear Fri, 07/14/2017 - 08:55 Permalink

It means more QE folks. This time instead of the $85 billion/month it will have to be at least $200 billion/month.Each time the heroin must be more than doubled to have any effect until the patient dies.

Give Me Some Truth rejected Fri, 07/14/2017 - 10:50 Permalink

Re: Prevalence of "lawn-cutting entreprenuers."You think all these entrepreneurs are paying their full share of taxes?Many of these entrepreneurs recently worked in other businesses. Anyone with a lawn mower, a weed eater and a truck can go into this business. There are plenty of customers who can use the service because yards are bigger and Moms and Dads must both work to make ends meet. Dad (or single mom in many cases or single grandma) would rather not cut the grass too.This is also a service job that high school boys once did on the side. Apparently these kids are no longer interested in such work/income. You also had "yard men" (usually older African-American men) who for some reason seem to have disappeared as well.

In reply to by rejected

yogibear Fri, 07/14/2017 - 09:02 Permalink

No real production, just transfer of wealth.Last QE - $85 billion/monthNext QE $200 billion/monthFollowing QE $500 billion/monthif it makes it to before the SHTF$1.2 trillion/month.

Give Me Some Truth yogibear Fri, 07/14/2017 - 09:21 Permalink

And as the next round of "QE" ramps up we can expect major hits on gold and silver. QE is really just a synonym for fiat-creation/protection. Somehow the more "money" that is created by the government and the Fed and then distributed to its strategic crony partners, the WORSE sentiment becomes for old-fashioned real money.Actually, what happens is simple. The "powers that be" KNOW that they are going to have to print/produce/buy more fiat and/or create more debt; they also know that in order to pull off this operation they have to create a world where it's a certainty that gold and silver will NOT appreciate in value. Said differently, they have to create a (manipulated) world where only dumb-ass, crazy fools would "invest" in gold or silver. After all there must be "full faith" in the credit and fiat of the U.S. government, right? Such "faith" might not exist if there was genuine competition between monetary choices (real vs. printed).Anyway, when QE HAS to go into hyperdrive, it's imperative that market rigging in the monetary metals also goes into hyperdrive. One cannot occur without the other.And as increased QE is a certainty so too is increased suppression of gold and silver.Just pointing out the obvious.

In reply to by yogibear

Give Me Some Truth Fri, 07/14/2017 - 09:04 Permalink

Wait one dang second here. Last week the price of silver plunged almost seven percent. The reason given was the old stand-by: "Fed expected to raise interest rates."Now you are telling me that the Fed is NOT going to raise interest rates?The alternative reason cited by the Price Plunge Reason Guy (employed by the CIA working closely with liasons at Bloomberg, the WSJ and CNBC) was that the dollar was rising. Huh? The dollar rose for like one day and then started falling again .... just like it's been falling for months.Anyway, please consider this my written request to receive a full rebate on the 7 percent I lost with my silver portfolio.  

wholy1 Fri, 07/14/2017 - 09:34 Permalink

What remains of a once vibrant WORKING, PRODUCTIVE "middle class" is becoming increasingly "tapped out".  Been harping this since, oh, 2008 - BEGINNING of the GreatER Depression cuz . . . it's a P-R-O-C-E-S-S.

aliens is here Fri, 07/14/2017 - 09:36 Permalink

Trump needs to push his tax cuts and his pro-growth agenda now. GOP in congress is trying very hard to lose 2018 and if DemonRats win back control Trump is done. Man, Republicans in congress are the stupidest people around.

Dead Indiana Sky Fri, 07/14/2017 - 09:42 Permalink

My birthday was a few days ago.  Mrs. Sky kept asking me over the last month "what do you want for your birthday?  what do you want?"  I couldn't really think of anything, because we already have ENOUGH shit, and don't NEED anything else.

Give Me Some Truth Fri, 07/14/2017 - 11:01 Permalink

Re: Lawn-cutting entrepreneursI'm 51. I remember as a 12 to 21 year old that I used to cut the grass for $5 then maybe $10 or $15 tops. I had friends who made a pretty good living cutting a good number of neighborhood and business yards.Fast forward 30 years and  I pay $60 to have my grass cut and this (I understand) is lower than many of my friends/peers/neighbors.I see no high school-aged kids cutting grass. Today, I guess they would have to get a business license and declare all income for tax collector purposes. If the kid didn't he would be getting into the pocket of his competitors, who are the dads of a lot of his friends. Dads who used to work at the hardware store or own another business.I also note that the prices charged by home-cleaners have increased by a similar percentage (600 percent or more).