Retail Sales Rose 0.3% in October, Reversing September’s Decline

The Advance Retail Sales Report for October (pdf) from the Census Bureau estimated that our total seasonally adjusted retail and food services sales were at $444.5 billion in October, which was an increase of 0.3% (±0.5%)* from the revised September sales of $443.0 billion, and 4.1% (±0.9%) above sales in October of last year..  Recall that the asterisk on October’s sales indicates that from their small sampling of retail outlets, Census cannot yet determine for sure whether sales rose or fell for the month. September's seasonally adjusted sales were originally reported at $442.7 billion, and although there was a small upward revision, the percentage change from August to September remained unrevised as a drop of 0.3% (±0.2%).  Estimated unadjusted sales in October, extrapolated from surveys of a small sampling of retailers, indicated sales rose to $440,562 million in October from $425,110 million in September, and up from the $421,358 million in October a year ago, so we can see there were small upward seasonal adjustments to sales data for both months...

To break down the details of this October retail sales estimate, we'll start by including the table of monthly and yearly percentage changes in sales by business type taken from the Census pdf.  The first double column below gives us the seasonally adjusted percentage change in sales for each type of retail business type from September to October in the first sub-column, and then the year over year percentage change for those businesses since last October in the 2nd column.  The second pair of columns gives us the revision of last month’s September advance estimates (now called "preliminary") as revised in this report, likewise for each business type, with the August to September change under "August 2014 revised" and the revised September 2013 to September 2014 percentage change in the last column shown.  For reference, here is what those September percentage changes looked like before this month's revision....  

October 2014 retail sales table

Looking at the details for October sales in the first column above, we see that motor vehicle and parts sales rose by 0.5% to a seasonally adjusted $89,659 million after falling 1.2% in September; however, excluding motor vehicles and parts, retail sales still rose 0.3% in October to $354,832. Other than automotive products, October's retail sales gains were stronger than average for nonstore (ie, online and mail order) retailers, where sales rose 1.9% to $40,839 million; for specialty stores, such as sporting goods, book and music stores, where sales rose 1.2% to $7,479 million; for bars and restaurants, where sales rose 0.9% to $48,645 million; for health and drug stores, where sales rose 0.7% to $25,491 million; for miscellaneous store retailers, where sales rose 0.6% to $10,065 million, and for clothing stores, where sales rose 0.5% to $21,122 million. On the other hand, October sales were weaker at electronics and appliance stores, where sales fell 1.6% from the September high to $9,189 million, at gas stations, where sales fell 1.5% to $43,860 million on lower gas prices, and at department stores, where sales fell 0.3% to $13,785 million, while overall sales at general merchandise stores were flat at $55,760 million..

Although the September 0.3% decrease in overall retail sales went essentially unrevised, there were revisions in sales for many of the component business types worth noting.  The table of component changes from last month's advance release is here, while the revised changes for September are shown in the last two columns in the table above.  We can first note that September sales at auto dealers, the largest component of retail sales, were revised from the originally reported 0.8% decrease to a drop of 1.3%, although the decrease for the entire automotive sales group was a bit less at 1.2%.  What that revision means is that retail sales for September excluding the automotive sales was unchanged, rather than the 0.2% decline reported a month earlier.  Other retail businesses seeing a sizable negative revision to their September sales included general merchandize stores, which had been reported seeing 0.2% sales growth, and are now seen with a 0.2% decline in sales, miscellaneous stores, whose September sales were revised from a decrease of 0.2% to a 1.7% decrease, and clothing stores, where a 1.2% decrease was revised to 1.5% lower sales.  Several business types also saw their September sales revised higher; sales at electronics and appliance stores, which had been reported with a 3.4% increase, have been revised to show a 4.7% increase, largely on the strength of iphone6 sales; furniture stores, where sales had been reported down 0.8%, are now seen as unchanged; nonstore or online sales, originally reported down 1.1%, are now seen dropping just 0.3% in September.  Similarly, sales at  building materials and garden supply stores, which were originally reported as down 1.1%, have been revised to a 0.6% decrease; sales at specialty store sales, as sporting goods, book and music stores, were also revised from a 0.1% decrease to a 0.5% increase, and sales at food and beverage stores, originally reported as unchanged, are now seen as 0.4% higher in September...

(above excerpted from my summary on MarketWatch 666)

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