**MNI 5 THINGS: June US Retail Sales +0.5%, Below Expected>

--5 Things We Learned From The June Retail Sales Data

By Kevin Kastner, Shikha Dave and Harrison Clarke

     WASHINGTON (MNI) - The following are the key points from the 

June retail sales report from the Commerce Department released 

Monday:               

     - June retail sales rose 0.5% in the month, below analysts 

projections for a 0.6% gain and the market whisper projections for a 

0.8% rise, both of which had been based on the correct assumption of 

strong auto sales. Other sales categories were mixed in June, but the 

already-strong May sales month was revised higher, so the market 

reaction is likely to be mixed. 

     - Excluding a 0.9% gain in motor vehicle sales, retail sales were 

still up 0.4%, compared with the 0.3% gain expected. Overall sales and 

sales excluding motor vehicles were revised up solidly in May and down 

slightly in April. Analysts have recently tended to overestimate both 

overall and ex-motor vehicle sales in June, so today's data keep the 

trend for the overall figure. 

     - June sales rose 0.3% ex. motor vehicle and gas, and were flat for 

the "control" group (ex auto, building materials, gas and food 

services), but following on the very strong May readings, softer June 

gains were not a surprise. 

     - Gas station sales rose further, registering a 1.0% gain in the 

month (retail sales ex. gas +0.4%), while building materials rose by 

0.8% and food services were up 1.5%. The other categories were mixed, 

with sales at health care stores up sharply, but offset by sharp 

declines at clothing stores after a strong May increase. 

     - At an annualized rate, second quarter total sales were up 7.9% 

from the first quarter average, based on an MNI calculation. Sales were 

up 7.7% ex motor vehicles, and up 6.5% ex autos, building materials, 

gas, and food services, suggesting second quarter PCE will be strong. 

     ** MNI Washington Bureau: 202-371-2121 ** 

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