September Retail Sales

It comes as no surprise that retail sales declined in the month of September relative to August, falling 1.5%.  As suggested in our report of August’s results (see “Looking Under the Hood” in our blog archives at, the government’s Cash for Clunkers program seems to have moved some sales that could have been expected to show up in September forward, contributing to the robust headline number in August.  Given this implied volatility, our attention then and now is focused more on the “core” retail sales number which excludes automobile and gasoline purchases.  They were seen as rising .6% in the original August report.  For September the improvement continues in evidence, up .4% for the month.  Both the headline and core numbers have proven stronger than consensus for two months now.  Still, year-over-year sales remain down 5.7%, although this shows a slight .1% improvement over the prior month.  While few are projecting a rapid return to robust retailing anytime soon, the upticks are most welcome, providing yet another light to guide our steps along the road to recovery.  Given this improving trend which is compounded in our view by similar action in some of our other indicators, we are moving the needle for Retail Sales up a notch from abysmal to seven on our indicators page.