WHAT TO WATCH: WILL RETAIL SALES RISE?

Retail SalesThe Retail Sales Report is the first picture of consumer spending that we get each month. That makes it the most timely indicator of broad consumer spending patterns.

What does it measure? The Retail Sales Report is a measure of the total receipts of retail stores from samples representing all sizes and kinds of business in retail trade throughout the nation. Retail sales include:

  • Durable merchandise sold
  • Nondurable merchandise sold
  • Services related to the sale of merchandise
  • Excise taxes incidental to the sale of merchandise

The report does NOT include sales taxes collected directly from the customer. It also does not include spending for services, even though such spending is a large component of consumer expenditures.

What’s happened recently? The Commerce Department reported that April Retail Sales came in lower than expected and down from the number recorded in March. The spring thaw didn’t turn out to be a boon for retailers, as most pundits were looking for a positive turnaround after the big chill in winter.

What’s the bottom line? When Retail Sales growth stalls or slows, it means consumers are not spending at previous levels—which can move the markets due to the large role that retail sales play in the health of the economy. That being said, Retail Sales data can be volatile from month to month. So despite the recent dip, the markets will be watching closely to see if future reports will move in a positive direction…or if revisions to the previous releases will throw a curve.

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