US Headline Retail Sales Stall In July, Core Soars

A slow-down in headline retail price growth was expected due to falling gas prices, but ex-Autos/Gas, sales (notional remember) were expected to rise.

BofA debit/credit card data shows headline retail sales missing due to drop in gas prices but core retail sales beating due to sure in real spending pic.twitter.com/EbGQhAnbjS

— zerohedge (@zerohedge) August 17, 2022

Analysts were almost right with the headline actually unchanged MoM (below the +0.1% expectation) but ex-Autos up 0.7% MoM vs +0.4% expected.

Source: Bloomberg

So pretty much everything was higher apart from autos, gasoline, and general merchandise stores…

Notional retail sales have not fallen for 7 straight months which pushed the YoY retail sales growth higher for both headline and core…

Source: Bloomberg

Finally, after 4 straight months ‘real’ retail sales drops, real retail sales were flat in July (this is core retail sales minus CPI – which admittedly is not apples to oranges but is good enough for government work to get an idea of the actual changes in spending)…

Source: Bloomberg

Furthermore, notional retail sales are increasingly being funded by soaring credit card debt – not exactly a sign of confidence by the consumer; more a sign of desperation to maintain a standard of living.