Dept. of Commerce and NRF data show decent August retail sales numbers

Consumers came out to spend in August based on retail sales data for the month issued by the United States Department of Commerce and the National Retail Federation (NRF).

Commerce reported that August retail sales at $447.7 billion were up 0.2 percent compared to July, following a 0.6 percent June to July gain, and up 2.2 percent compared to August 2014. Total retail sales from June through August were up 2.2 percent compared to the same period in 2014.

The NRF reported that August retail sales, which exclude automobiles, gas stations, and restaurants, were up 0.2 percent on a seasonally-adjusted basis compared to July, following a 0.3 percent gain from June to July, while also seeing a 2.6 percent gain compared to August 2014.

“Retail sales showed solid gains in August, despite financial market volatility and a deflationary pricing environment in retail,” said NRF Chief Economist Jack Kleinhenz in a blog posting. “While today’s data is a positive signal as we head into the holiday season, which accounts for approximately 20 percent of annual industry sales, there remain a few potential speed bumps such as lackluster wage growth, uncertainty around a possible government shutdown, Federal Reserve policies as well as global market events. That said, I expect the American consumer will remain resilient but will continue to make measured decisions in their purchases in the coming months.”

This most recent batch of NRF data comes after the organization lowered its 2015 annual growth forecast from 4.1 percent to 3.5 percent. When it lowered its estimate, the NRF cited unexpected slowdown in growth in the first half of the year, as well as a deflationary retail environment that it explained was challenging for retailer’s bottom lines.

Supply chain stakeholders describe the current market environment as it relates to retail supply chains as steady for the most part. And with retailers having made their bets on the 2015 holiday season to a large degree-at a time with inventory-to-sales ratios remain higher than desired, retail sales data for the month of September and into October will serve as a strong indicator as to how things are shaping up for the home stretch of 2015.

Consumers came back to life in the first two months of the third quarter after lying low in June, wrote IHS Global Insight Director of U.S. Consumer Economics Chris Christopher in a research note. “August was a good auto sales month and a decent discretionary spending month. Discretionary spending improved significantly in July and August, indicating that the back-to-school retail sales season has been relatively successful despite a loss in consumer confidence.”

Looking ahead to the rest of the year, he explained that the consumer spending outlook is looking relatively positive for the remainder of the year due to real disposable income gains, modest consumer price inflation, lower energy prices, relatively solid employment gains, and a housing market that is gaining traction.