Little Cause For Consumer Concern In Retail Sales Report

May headline advance retail sales come in better than expected (+0.3% vs -0.2% survey, +0.4% prior), with the "core" categories basically in line. Not much here to get excited about, but likewise, not much to be concerned about vs the existing narrative of slower retail goods demand.

• The control group category - key for the quarterly GDP reading - was in line at +0.2%, but April's reading was revised down a touch (0.1pp to +0.6%).
• Ex-Auto and Gas beat (+0.4% vs +0.2% expected) but again a slight downgrade to prior (0.1pp to +0.5%).
• Looking at the largest categories of retail businesses, we saw decent increases for the most part, though as usual performances were mixed: motor Vehicles +1.4% M/M, Food/Beverage +0.3%, Building materials +2.2%, Health/personal flat at 0%, Gasoline -2.6%, Gen Merchandise +0.4%, Nonstore retail +0.3%, and food services/drinking places +0.4%
• Of course, these are nominal figures which can be compared broadly with the 0.1% M/M CPI reading for May. A drop in gasoline prices was a heavy drag on the headline figure as expected.
• Looking at the bigger picture, a crude approximation of "real" sales deflating by the CPI index suggests a continued slowdown in retail volumes on the year, to -3.6% Y/Y, vs +1.2% Y/Y for nominal.
• Again, this is to be expected in part because of the shift away from goods consumption towards services consumption.