June Sales Show US Consumer Alive, USD Starts the Comeback

The USD has been on the back foot in July as US economic data has been weakening, but today’s retail sales show that the US consumer is holding up. It’s not that this will change the FED rate policy, but it strengthens the case that the US economy is not heading into a recession. That would force the FED to embark on a steep rate-lowering policy, which would send the USD crashing lower.

Compared to predictions, the report is stronger from most perspectives despite the headline number falling flat. Furthermore, the retail sales revisions were positive, coming into positive territory. Dow is up 175 points. S&P is up 17 points, while NASDAQ is up 60 points. The 2-year yield is trading near a high of 4.47%, up 1.0 basis points. The 10-year yield stands at 4.23%, down 2.1 basis points. The auto industry (and petrol stations) performed poorly last month. Motor vehicle and parts dealers decreased by -2.0% MoM.

US June 2024 Retail Sales Report

Headline Figures:

• US June retail sales: 0.0% (vs. -0.3% expected)
  • Previous month revised from 0.1% to +0.3%
• Retail sales: $704.3B (vs. $704.5B last month)

Retail Sales Breakdown:

• Retail sales YoY: +2.3%
• Ex Autos: 0.4% (vs. 0.0% expected)
  • Previous ex autos revised from -0.1% to 0.1%
• Control group: 0.9% (vs. 0.2% expected)
  • Previous month control group: 0.4%
• Ex autos and gas: 0.8% (vs. 0.3% last month, revised from 0.1%)

Sector-Specific Changes (MoM and YoY):

• Non-store retailers: +1.9% MoM and +8.9% YoY
• Food services and drinking places: +0.3% MoM and +4.4% YoY
• Furniture: +0.6% MoM and -4.0% YoY
• Building materials and garden equipment: +1.4% MoM and -0.9% YoY
• Gasoline stations: -3.0% MoM and -0.4% YoY
• Clothing: +0.6% MoM and +4.3% YoY
• Autos: -2.0% MoM and -2.2% YoY

Retail sales remained flat in June, defying expectations of a -0.3% decline. The previous month’s figures were revised upward from 0.1% to 0.3%. Total retail sales amounted to $704.3 billion, slightly down from $704.5 billion last month.

Key components showed mixed performance. Sales excluding autos rose by 0.4%, beating the estimate of 0.0%, and the control group saw a significant increase of 0.9%, surpassing the 0.2% forecast. Sales excluding autos and gas climbed by 0.8%, compared to last month’s 0.3%.

Non-store retailers experienced a notable 1.9% MoM rise and an 8.9% YoY increase, while food services and drinking places grew by 0.3% MoM and 4.4% YoY. Furniture sales edged up by 0.6% MoM but fell by 4.0% YoY. Building materials and garden equipment sales increased by 1.4% MoM but declined by 0.9% YoY. Gasoline stations saw a 3.0% MoM decrease and a 0.4% YoY drop. Clothing sales rose by 0.6% MoM and 4.3% YoY, whereas auto sales decreased by 2.0% MoM and 2.2% YoY.