Boockvar on Retail Sales
From Peter Boockvar:
Retail sales better than expected
Core retail sales in May rose .7% m/o/m after a .5% increase in April and that was 3 tenths above the estimate. Above this line, sales for autos/parts were up by 1.2% m/o/m after dropping by .9% in the month before. They are up 1.8% y/o/y. Building material sales were flat and up by 1.8% y/o/y. As to be expected, gasoline station sales increased by 3.4% m/o/m and 25% y/o/y with price being the main reason.
Sales were up in furniture, clothing, sporting goods, online retail, general merchandise (like department stores) and in the miscellaneous category which includes dollar stores, convenience stores, pet, etc…
On the downside, sales fell for electronics after strength in the prior months and still up 5.9% y/o/y. Sales dropped by one tenth at eating/drinking establishments but after a .9% rise in April and sales here were up 2.4% y/o/y.
Bottom line, a lot coursing thru this data. We have tax refunds on one hand but we also have inflation, mostly at the gas pump on the other and a reminder too that this data is in nominal terms. Wages are still growing but now less than inflation and in part why the savings rate keeps dropping. And we wonder how much of the lift in sales was a consumer response to buy things ahead of expected price increases.
While not apples to apples, headline retail sales were up 6.9% y/o/y (after a 4.8% increase in April) vs the May CPI rise of 4.2% (vs 3.8% in April).
Treasury yields didn’t move much in response with the 2 yr at 4.06%, the 10 yr at 4.43% and the 30 yr at 4.93%.
Positions: None.
