Long Term Consumer Trends

Since the retail sales data released today by the census bureau was for December of last year we they give us an early picture of how the full year shaped up.  For all of 2012 retail sales were up a respectable 5.2%.  The auto category led the way, up 7.9%, while consumer electronics actually fell 0.8%.  Current dollar retail sales hit another all time high at $4.89T.

Taking a longer term view, below is a table showing the evolution of consumer wallet share since 1992.  Over the last 20 years Americans are spending a smaller percentage of their retail dollars on cars and at grocery stores and more at gas stations, drug stores, restaurants and online.

Percentage of Total US Retail Sales Spent on Category

September Retail Sales

Retail Sales numbers released this morning were reasonably strong, up 1.1% for the month of September and 5.3% y/y.  Sales at general merchandise stores stood out as a weak point though.  General merchandise sales make up about 12.5% of the total and were down 1.1% year over year.

A summary of retail sales data and the categories that make up General Merchandise are below.  Census doesn't break out specific businesses that make up each NAICS category, but it's probable that Walmart, Target and Costco would be included in the category.

Retail Sales June 2012

Retail sales were reported this morning for June and were weak again.  For the third straight month, retail sales declined, which is a reasonably rare occurrence.  Since 1992, there have been 4 periods that retail sales have declined in three straight months.  Two of those periods happened in 2008; one of those periods lasted for 6 months.  Below is a list of negative retail sales streaks:

Looking at the bigger picture, retail sales growth has slowed to just a 3.8% y/y increase in June.  The slowing trend doesn't necessarily indicate recession, but certainly demonstrates that the rapid growth phase of the economic cycle is over.  As recently as this time last year retail sales were up 9.2% y/y, but  now it looks like there isn't the same slack in the economy that there was then to generate large growth numbers.