By Denny Gulino
WASHINGTON (MaceNews) – U.S. retail sales were weak in August after adjustment for recurring seasonal trends, the Commerce Department reported Friday, a lull that was easily dismissed as temporary by most analysts but which came amid many signs of continuing fundamental weakness for the retail industry.
The advance retail sales estimate by the Census Bureau showed a 0.1% increase for the month, below the widespread expectations of a 0.3% to 0.4% move up. July’s result, however, was revised to be a much stronger number, a 0.7% improvement from the original 0.5%. The sales figures are subject to relatively large revisions since the advance report is based on a 5,500 store sample of a 3 million store universe.
The report suggested as well that price cutting for clothing was particularly severe in August, with the value of sales in that category down 1.7% from July, in line with the reading from Thursday’s Consumer Price Index. In fact, the government price reports for consumer and business inflation earlier in the week both had shown August to have the biggest annual-rate deceleration since April.
In the Consumer Price Index report apparel prices fell 1.6%, the most of any major category and a steeper drop than the 1.4% for the year as a whole through August. For sellers there was a margin squeeze, since in the Producer Price Index report for the month, textile product costs went up 0.3%.
Another government price report published Friday added to the picture of decelerating inflation. The prices of imported goods declined 0.6% in August, the most since January 2016, after slipping a tenth in July.
The domestic retail sales report further reinforced the impression that despite some rebounds, brick and mortar retailers are seeing online sales continue to show healthy growth while their in-store results suffer. The August report showed e-commerce or “non-store” sales up 0.7% while department store sales were down a full percentage point. The report does not break out the online sales of retailers primarily selling from fixed locations.
Several organizations have been tracking the worst performers among retailers, a list that includes many major brands that have announced significant numbers of stores being closed. Those that have already shut down, like Toys “R” Us, and long-time ailing franchises, like Sears – which Thursday issued still another performance warning – have been joined by a growing list of firms experiencing setbacks with much more recent origins.
The August sales report was saved from going a tenth negative by a spike in spending on gasoline, up 1.7%. Auto sales were down 0.8% for the month though for the year they are up 4.0%. Furniture store sales slipped 0.3%.
Retail sales overall rose 6.6% for the year through August and without autos, rose 7.3%. Excluding gasoline sales, the annual increase was 5.5%.