MNI ANALYSIS: US July Retail Sales Jump 0.6%, June Revised Up>

--July Sales Up 0.5% Ex. Motor Vehicles; Ex. MV, Gas, Bldg Mat +0.6%

--July Import Prices +0.1%, Ex. Fuels -0.1%, Ex. Petroleum Flat

By Kevin Kastner, Sara Haire, and Holly Stokes

     WASHINGTON (MNI) - The value of retail sales rose 0.6% in July, 

well ahead of expectations for a 0.3% gain, and followed a sharply 

upward revised 0.3% gain in June, data released by the Commerce 

Department Tuesday morning shows. 

     Total retail sales were originally reported down 0.2% in June. May 

sales were also revised up and stand at flat now after being reported 

down 0.1% last month. 

     July retail sales were still up 0.5% excluding the motor vehicle 

component, which posted a 1.2% surge in the month after rising 0.9% in 

the previous month. Retail sales ex. motor vehicles rose 0.1% in June, 

an upward revision from the previously reported 0.2% decline 

     Excluding motor vehicles, gasoline, and building materials, "core" 

retail sales were up 0.5%. And for good measure, excluding food services 

as well as the those three measures, retail sales were up 0.6%. 

     The data suggest a possible upward revision to second quarter PCE 

as well as a solid start to the third quarter. Incorporating the July 

gain and the revisions to May and June, overall July retail sales were 

up 3.2% at an annual rate from the second quarter average. At the same 

time, sales excluding motor vehicles were up 1.8% from the second 

quarter, while sales excluding motor vehicles, gas and building 

materials were up 2.6%. With food services also excluded, sales were 

also up 2.6%. 

     Building materials sales rose 1.2% in July following a 1.1% gain in 

June. Gasoline store sales, meanwhile, fell 0.4% in July following a 

1.5% decline in June. 

     In addition to the motor vehicle category, there were sales gains 

for every other major component except for electronics and appliances 

(-0.5%) and clothing stores (-0.2%). Food services and drinking places 

were up 0.3% in July. 

     Also released on Tuesday, import prices rose 0.1% in July, as 

expected, and were down 0.1% excluding fuel prices and flat excluding 

just petroleum prices. 

     Overall import prices rose 1.5% from a year ago, while prices 

excluding fuels were up 0.7% year/year and up 0.9% year/year excluding 

only petroleum, suggesting little forward momentum. 

     When food and fuels were both removed, import prices were unchanged 

from June and up only 0.6% from a year earlier. Fuel prices rose 0.5% in 

the month, as petroleum prices rose 0.7%, offsetting a 5.0% decline in 

the relatively small natural gas category. 

     Import prices rose for foods and feeds and capital goods, but fell 

for industrial supplies outside of fuels, and for vehicles and engines. 

Consumer goods prices were flat. 

     Export price posted a 0.4% gain overall and were still up 0.3% 

excluding a 2.1% surge in agricultural commodities prices. 

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

[TOPICS: MAUDS$,MT$$$$,M$U$$$,MAUDR$]