Retail sales were unchanged in the US last month, reflecting a weekslong drop in gas prices, data out Wednesday showed.
Consensus expected a small gain. The range of estimates, from more than five-dozen economists, was -0.5% to 0.9%.
Spending at gas stations fell 1.8% from June (green bar in the figure, below), a welcome reprieve after burdensome increases in prior months.
But, in a testament to the notion that incremental relief is no substitute for a return to normalcy, gas station receipts were 40% higher versus July of 2021. Eventually, the 12-month prints will roll over. Eventually.
The prior month’s headline advance was revised lower to show a 0.8% gain. Although flat from June, sales in July were more than 10% higher versus last year, consistent with surging consumer prices (and base effects). The figures aren’t adjusted for inflation. Nine of 13 categories increased on a MoM basis, the same as the prior month.
The ex-autos print showed a 0.4% advance for July, much better than the -0.1% consensus expected. Ex-autos and gas, sales rose 0.7% (figure below).
The control group notched a 0.8% increase, likewise better than forecasts. That was tempered (a bit) by a downward revision to June’s control group reading, but with the market looking ahead (i.e., focused on the outlook for growth in the third quarter), the revisions were less germane.
The read-through from the juxtaposition between the unchanged headline print and beats on the other aggregates was straightforward: US consumers likely spent at least some of their gas “savings” (and that’s a ridiculous misnomer in this context) on goods purchases, discretionary or otherwise. Spending at non-store retailers rose 2.7%, while restaurant receipts managed only a meager gain.
The numbers weren’t indicative of a consumer inclined to save money at the first opportunity. This is most assuredly a case where the headline print should be ignored in favor of focusing on the core measures, which suggested Americans are far from any sort of across-the-board retrenchment.