May 2015 Retail Sales

Consumers opened their wallets wider in May according Retail Sales data from the Census Bureau.  Sales totaled $444.9 billion in the period, up 1.2 percent from a month earlier.  For comparison, this indicator has grown just 2.7 percent from a year ago, so spending in May 2015 really accelerated relative to the trend.

Receipts were strong across many parts of the report.  Auto sales continue to be a leader, jumping 2.1 percent in the period.  Building material & garden equipment retailers also experienced a 2.1 percent increase in May.  Petrol prices continued moving away from their recent lows which helped gasoline station revenues increase 3.7 percent from a month earlier, but this segment is 18.6 percent lower than a year earlier.  Another standout category in May was the 1.4 percent rise for nonstore retailers; this category is 7.8 percent higher from the same period a year ago.  Finally, Atlas pays close attention to the food services portion of the report because it represents a very discretionary segment of the economy.  While its growth pace slowed, it still managed to improve 0.1 percent in the period and is one of the top performing categories year-over-year, up 8.2 percent.

Consumers appear to be supporting the economy in the second quarter.  This will likely further influence the Federal Reserve toward increasing the overnight interest rate since the economy is growing even after their program of Quantitative Easing (money printing) was diminished.  Moving the overnight interest rate from virtually zero to barely above zero does not seem like a big step to Atlas, but many are holding their breath as the world waits to experience the American economy with the Fed using smaller training wheels.            (by C. Cox)