Headline Retail Sales Soft, Details Better

Headline retail sales were a bit weaker than expected with a 0.5% decline after a 1.1% decline in May. However, the weakness was concentrated in autos, gasoline and building materials, which the Commerce Dept picked up from different reports for GDP calculations. When excluded the June core-core retail sales rose 0.2% after a 0.2% decline in May. Although consumer goods imports rose in May, it does not seem to be a harbinger of stronger consumers. Most economists expect household consumption to contribute less than in Q1.

Separately, the US reported a 1.3% drop in import prices, much more than expected (~-0.4%). Ex-fuel, import prices fell 0.6%. Consumer goods imports prices fell 0.4% and are down 0.1% year-over-year. Capital goods prices fell 0.3% for a 0.7% decline year-over-year. The only "inflation" to speak of was in industrial supplies. Prices are up 13.4% year-over-year though they fell 3% on the month.

The US dollar is softer after the data and we'd note that the Canadian dollar and Mexican peso seem to be adversely impacted by disappointing headline retail sales.
Headline Retail Sales Soft, Details Better Headline Retail Sales Soft, Details Better Reviewed by Marc Chandler on July 14, 2010 Rating: 5
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