CARS TOW RETAIL

Retail Sales Show Strength in Autos, and Autos

Explain Economic Progress.

Ron McWilliams

Last week, the U.S. Census Bureau released a couple of reports that can aid in discerning the nature of this economy, and potentially where it might go. The first release was the Advance Monthly Sales for Retail and Food Services. The Bureau then released its Monthly Wholesale Trade: Sales and Inventories.

Based on the retail sales report, from October through December, motor vehicle sales lead the index by closing out the year with a m/m increase of 2.5% and a y/y increase of 10%. Grocery and general merchandise stores saw weak growth, and even negative numbers, while gas stations ended 2011 strong but behind autos.

U.S. Census Bureau Retail Sales (October 2011-January 2012)

	January		December		November		October
	m/m	y/y	m/m	y/y	m/m	y/y	m/m	y/y
Total	0.4	5.8	0	6.2	0.4	8.3	0.6	7.5
Mot vehc	-1.1	7.3	2.5	10	0.9	8.3	0.8	7.5
Build mat	0.2	8.1	2	6	-0.1	5	1.4	5.3
Grocery	1.3	4.3	-0.6	4.2	-0.2	4.7	0.6	5.9
Gen. Merc	2	5.8	-0.7	3	0	2.7	-0.1	4.6
Gas	1.4	7.4	-2.6	7.4	0.9	14.6	-0.4	15.6



Mot vehc = Motor Vehicles  Build Mat = Building Materials  Gen. Merc = General Merchandise  Gas = GasStations

I’ve noted in the past that the ICSC-Goldman Same Store Sales weekly index showed signs of anemia through January. Notably, the index showed a couple of weeks with significant declines (of up to -5.4% for the week of 1/7), met only with a couple of weeks of minor gains (in the .1% area). For the start of February, the index registered a gain of 1.8%, but then showed a decline of -2.0% a week later. The most recent week of 2/18 shows a good 3.0% increase, with a y/y change of 3.2%. This y/y number is down from December’s close of 3.9%.

Where the ICSC-Goldman index doesn’t include autos, the Bureau’s retail index does. The Bureau’s retail index shows weakness in consumer staples and discretionary areas, but considerable strength in autos, building material suppliers and gas stations. Autos have essentially driven strength in retail while consumer staples and discretionary seem to be lagging.