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By the Numbers

Featuring brief segments of economic analysis from our senior economist Michael Bazdarich, PhD.

The economic analysis we previously featured in By the Numbers is now available on the Western Asset Blog. This page will no longer be updated.

September Retail Sales: Soggy As She Goes, But Better Than 2012–13

Last month’s retail sales gains were the first truly good ones of the year. While retail sales registered relatively strong growth in the second quarter, those gains were solely an offset of winter-related softness. Through mid-year, 2014 retail sales data continued the sluggish growth trends of 2012–13, but there had been no acceleration above those trends. Last month’s data changed that picture, as upward revisions to June/July and good gains in August pushed sales levels above previous trends.

The question then became whether September data would build upon or reverse the above-trend sales of mid-summer. Today’s September sales release put the data smack dab in the middle. Yes, sales declined in September, and yes, there were downward revisions to July and August. However, even with these downward moves, September sales levels remained slightly above 2012–13 growth trends, as has been the case throughout the last four months.

On average, retail sales growth has proceeded at a 3.7% annual rate in 2014 to date, compared with 3.2% growth over 2012–13. Once again, this picture is quite middling. It is better than the no-acceleration path we expected going into the year, but it is not enough to push the overall economy anywhere near 3% real GDP growth that the Federal Reserve and others were expecting. So, no, the consumer is not rolling over dead, but neither are recent trends indicative of a strong surge.

As for the details of retail, sales were down in September in every store category except electronics (think iPhone), department stores, and restaurants, and the department store gains were a tepid +0.16% month-over-month. Then again, most of the same store types that saw declining sales in September saw more substantive gains previously.

Retail Sales Trends
September Retail Trends Chart
Source: Census Bureau. As of 30 Sep 14. “Core” retail sales is total sales less vehicle dealers, service stations and building material stores.

Michael Bazdarich

Product Specialist/Economist

Mike brings more than 43 years of experience to his position. "By the Numbers" will address economic data releases that are pertinent to a broad range of investors.

Prior to joining the Firm in 2005, Mike ran his own consulting firm, MB Economics. He earned his PhD in Economics at the University of Chicago.

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