According to today’s report from the U.S. Census Bureau, seasonally adjusted retail and food services sales in June rose 0.4% month-over-month and 5.7% compared with June 2012. Economists had expected an increase of 0.8%. Excluding sales of cars and auto parts, sales were flat, well short of the 0.5% improvement expected by economists.
Auto sales rose 1.8% month-over-month and were up 11.4% year-over-year. Furniture and home furnishings rose 2.4% above May sales, and non-store sales (e-commerce) rose 2.1% over May and were 13.8% higher than June 2012.
Gasoline sales were up 0.7% over May and 4.3% higher year-over-year, largely due to higher pump prices. The cost of a gallon of gasoline has remained high even as crude and gasoline supplies continue to post high inventory levels.
Sales fell 2.5% at “miscellaneous” retailers and fell 2.2% at home improvement stores. Sales at department stores also fell 1%. Electronics retailers made a bit of a comeback, down 0.1% month-over-month, compared with a drop of 0.3% from last June. Electronic sales rose 0.1% in the second quarter, compared with a drop of 0.6% in the first quarter.
On a quarterly basis, auto sales rose 9% in the second quarter, compared with a rise of 2.8% in the first quarter. Gasoline sales, which fell 2.8% in the first quarter, rose 0.1% in the second. The effect of higher prices is noticeable here in both quarters. Gasoline prices spiked in February, leading to a decline in price, but the price did not continue to fall in the second quarter, leading to more consumer spending on fuel.
We could be seeing a more cautious approach to consumer spending due to the relatively higher price for gasoline. A lower price for fuel may be the answer, but the question is when the drop will begin.