U.S. Retail Sales – May 2017

Released Wednesday, June 14, 2017

downloadsRetail Sales: -0.3% month-over-month (Cons: 0.0%); +3.8% year-over-year
Core Retail Sales: Unchanged month-over-month (Cons: +0.3%); +2.9% year-over-year

Quick Take:
U.S. retail sales fell 0.3% month-over-month in May, which was a drop from April’s 0.4% month-over-month growth. Year-over-year, retail sales were up 3.8%, which was down from 4.6% year-over-year growth in April. Excluding automobile and gas sales, retail sales was unchanged month-over-month.

Core retail sales were unchanged month-over-month, and core retail sales were also revised higher in March. Year-over-year, core retail sales have grown 2.9%, which is unchanged from the year-over-year growth in April. Core retail sales exclude auto, gas, building materials and food services sales. Over the past six months, core retail sales are up 4.1% at an annualized rate.

Year-over-year, both headline and core retail sales growth have decelerated every month in 2017, and the deceleration in April and May is partially due to strong sales growth in April and May 2016 months rolling off the annual calculation. We continue to view retail consumption trends as healthy and would expect that trend to continue given the strong labor market trends and the potential for continued income growth.

Notable Data:
The drop in retail sales was driven by decreased sales of motor vehicles and parts, electronics and appliance stores, and gas stations, which fell 0.2%, 2.8% and 2.4% respectively in May. Nonstore retailers, primarily e-commerce, reported the largest month-over month growth with 0.8% sales growth in May. E-commerce continues to take market share from department stores as illustrated by the fact that e-commerce sales have grown 10.2% year-over-year, while department store sales have fallen 3.7% as of May.