





Consumer spending on retail goods is picking up in the second quarter in the wake of a holiday and first quarter that turned out weaker than first thought—given revisions to retail sales as tracked by the government.
This is the reading given by year-to-year growth measures—not the month-to-month measures that are popularly reported.
The recent year-to-year strength, however, is concentrated at furniture, home improvement, and online retailers. In contrast, most brick-and-mortar retail channels continue to show weak sales growth.
The latest numbers continue to provide a mixed picture about the degree to which a post-election surge in confidence—led by Boomers—is contributing to stronger spending. See more on confidence here.
Here is more on what the latest retail numbers say:
- Quarterly trend. Sales excluding autos and fuel are growing between 3.9% and 4.5% in the April-May period, depending on whether the focus is on seasonally adjusted or unadjusted data. The pickup is most evident in unadjusted sales, which had been growing less than 3.0% the prior two quarters—including the holiday period.
Monthly trend. In May, retail sales grew 3.8% year-to-year on a seasonally-adjusted basis and 5.3% on an unadjusted basis. In addition, the April results were revised upward significantly, which is also a key factor in creating the picture of a stronger second quarter.
- Strong channels. The strength in furniture, home improvement, and online is consistent with stronger confidence to spend that is focused in homegoods categories, especially among Boomers.
- Weak channels. Weakness at apparel, sporting goods, and electronics stores is consistent with weaker spending confidence among Millennials, who are a key shopper segment in those retail channels and categories. The grocery, drug, and mass channels also remain weak.
The latest data suggest that the year-to-date retail sales pace is just shy of the stronger pace forecast for 2017. MacroSavvy™ has forecast a gain of 4.0% in retail sales excluding autos, fuel and restaurants, which would be slightly stronger than 2016.
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