June's retail-sales report looked soft on the surface - and underneath, it was not. Americans' spending at stores and restaurants rose 0.2 percent in June, the Commerce Department said July 16, the smallest gain in five months and roughly in line with forecasts [1]. The weakness in the headline was almost entirely one thing: cheaper gasoline.
Receipts at gas stations fell 5.3 percent - not because people bought less fuel but because pump prices dropped, and since retail sales are measured in dollars, a lower price at the pump shows up as a smaller sales number [2]. Strip out gas stations and sales rose 0.7 percent; the 'control group' that feeds into GDP, which also excludes autos and building materials, rose 0.5 percent [2].
Data
| Headline retail sales | 0.2% change, June (MoM) |
|---|---|
| Excluding gas stations | 0.7% change, June (MoM) |
| Control group (GDP input) | 0.5% change, June (MoM) |
Underneath, the spending was broad. Auto and parts sales rose 1.9 percent; non-store retail, mostly online, rose 1.9 percent on the month and 14.2 percent over the year; restaurants and bars edged up 0.1 percent [2]. Adjusted for inflation, real retail sales rose about 0.6 percent - a solid month by the measure that matters for living standards [2]. May's figure was revised up to a 1.0 percent gain [1].
The record worth completing is the gap between the headline and the substance. A 0.2 percent print reads like a consumer pulling back; the detail shows the opposite - a lower gas price flattering-down a month in which people actually spent more, not less [1][2]. The number that looked like weakness was, in the main, a discount.
