Retail sales fall again in June, third straight month of decline

posted at 10:41 am on July 16, 2012 by Ed Morrissey

Falling consumer confidence led to a third straight month of contraction in the retail sector, dropping 0.5% in June.  It’s the third straight month that retail sales have declined, the first time since 2008 that has happened:

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for June, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $401.5 billion, a decrease of 0.5 percent (±0.5%)* from the previous month, but 3.8 percent (±0.7%) above June 2011. Total sales for the April through June 2012 period were up 4.7 percent (±0.5%) from the same period a year ago. The April to May 2012 percent change was unrevised from -0.2 percent (±0.2%)*.

In May, the auto industry gave the retail picture a bit of a bright spot.  As this chart from Commerce shows, that bright spot reversed itself, and the decline went across the board:

Reuters avoids the “U” word, but does note that analysts expected retail sales to rise modestly in June rather than fall:

It was the first time sales had dropped in three consecutive months since late 2008, when the economy was still mired in a deep recession. Analysts polled by Reuters had expected retail sales to rise 0.2 percent. …

The retail data is particularly worrisome because it suggests consumer spending, which drives about two-thirds of the economy, is also sagging.

Sales of motor vehicles and parts dropped 0.6 percent last month. Receipts at electronics and appliance stores declined 0.8 percent. Sales of building materials slipped 1.6 percent, while receipts as gasoline stations dropped 1.8 percent.

Excluding autos, sales fell 0.4 percent.

I’m not sure why Reuters expected an increase.  Consumer confidence indices had all shown declines over the last several weeks.  The last three jobs reports showed job creation had slowed to sub-population-growth rates, meaning that the economy was going backwards for workers.  Even the decline in gas prices mainly stopped in June, meaning that disposable income would have stopped growing (and shrinking, too).  Under those circumstances, a spike in spending seemed unlikely.

Reuters notes that this will make Barack Obama’s re-election pitch more difficult, giving Mitt Romney another entrée to discuss the failing economy.  However, that’s not most dangerous risk for Obama in this report.   These numbers show that consumers already know that the economy is failing, and are pulling back on spending decisions as the storm approaches.  It’s a better measure of voter assessment of the economy than polling provides, and that’s the real problem for Obama in these numbers.

Update: Manufacturing sales dropped slightly as well in May, while inventories rose:

Sales. The U.S. Census Bureau announced today that the combined value of distributive trade sales and manufacturers’ shipments for May, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,245.2 billion, down 0.1 percent (±0.2%)* from April 2012 and up 5.1 percent (±0.4%) from May 2011.

Inventories. Manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $1,578.4 billion, up 0.3 percent (±0.1%) from April 2012 and up 5.2 percent (±0.3%) from May 2011.

Update II: The reason this is the “worst quarter since 2008″ is that it’s the first time in four years that retail sales have declined for three straight months, which was in the Reuters excerpt :

It was the first time sales had dropped in three consecutive months since late 2008, when the economy was still mired in a deep recession. Analysts polled by Reuters had expected retail sales to rise 0.2 percent.

Since people tend to look at “worst” in terms of actual dollar figures, I’ve edited the headline to remove that.


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…what? again!

KOOLAID2 on July 16, 2012 at 10:45 AM

#doinjustfine

#stepinrightdirection

ted c on July 16, 2012 at 10:45 AM

“unexpected!”

KMC1 on July 16, 2012 at 10:46 AM

Headwinds.

petefrt on July 16, 2012 at 10:46 AM

…THE PRIVATE SECTOR IS DOING FINE!

KOOLAID2 on July 16, 2012 at 10:46 AM

I blame the earthquake

ted c on July 16, 2012 at 10:46 AM

Won Term Proposition

ted c on July 16, 2012 at 10:47 AM

…MSM…tax returns?

KOOLAID2 on July 16, 2012 at 10:47 AM

Worst quarter since 2008? I’m confused.

Total sales for the April through June 2012 period were up 4.7 percent (±0.5%) from the same period a year ago.

If sales were up from last year, how can this year’s be the worst since 2008?

ButterflyDragon on July 16, 2012 at 10:47 AM

If sales were up from last year, how can this year’s be the worst since 2008?

ButterflyDragon on July 16, 2012 at 10:47 AM

I thought I’d quoted this from the Reuters article, but it’s the first time we’ve had three straight months of decline since 2008.

Ed Morrissey on July 16, 2012 at 10:48 AM

Every Won One hit wonder band experiences a period of falling sales before they release their second album. Surely the radio listening public will boost these lagging sales once they see Obama’s newest singles climbing up the charts…./

ted c on July 16, 2012 at 10:49 AM

“Never mind retail sales, or unemployment for that matter. What we need to know is when Romney stopped running day-to-day operations at Bain Capital!”

/the media

MidniteRambler on July 16, 2012 at 10:49 AM

I blame the earthquake

ted c on July 16, 2012 at 10:46 AM

…there was flooding in Japan…
(shhhh!…need to find more reasons)…

KOOLAID2 on July 16, 2012 at 10:50 AM

Someone needs to make a pre-emptive TouchdownBuddha parody.

I’d do it, but it wouldn’t be that funny.

MidniteRambler on July 16, 2012 at 10:51 AM

I did not expect this.

Apologetic California on July 16, 2012 at 10:51 AM

Again, I can only go by my personal observations, but a lot of department stores I go to have been dead for the last few months. Aside from restaurants, people aren’t spending a lot of money right now.

Doughboy on July 16, 2012 at 10:51 AM

I thought I’d quoted this from the Reuters article, but it’s the first time we’ve had three straight months of decline since 2008.

Ed Morrissey on July 16, 2012 at 10:48 AM

Okay, thanks for the clarification. When I think of quarters, I just assume total revenue.

ButterflyDragon on July 16, 2012 at 10:51 AM

To the MSM it was “unexpected”
To those of us in Realville, it wasn’t.

SheVee on July 16, 2012 at 10:52 AM

The Great Recession continues.

rbj on July 16, 2012 at 10:52 AM

What we need to know is when Romney stopped running day-to-day operations at Bain Capital!”

/the media

MidniteRambler on July 16, 2012 at 10:49 AM

The Romney campaign needs to remind the public that, back in the day, you could actually leave one job and find another one, tschaaaa?! Unlike present times, that is……

ted c on July 16, 2012 at 10:54 AM

Well, obviously if we raise taxes the economy will grow robustly.

And if we throw money at “green” energy companies like Solyndra and promise Russia that we will get rid of our missile defense during the next term.

All of those things are “smart”.

Monkeytoe on July 16, 2012 at 10:55 AM

Comrade chairman Obama’s explanation…

Capitalism’s fault. If the evil greedy capitalists would stop hoarding their ill gotten gains and use them to hire people then more people would be able to buy stuff.

If you reelect me I’ll make them “contribute” their “fair share” and I’ll use it to create jobs.

farsighted on July 16, 2012 at 10:55 AM

“I inherited the worst economy in history”. – 0

kirkill on July 16, 2012 at 10:57 AM

Don’t worry…
Obama’s Welfare Work Waiver should take care of this latest problem. Instead of wasting time looking for work, free riders will have more time to go shopping.

SheVee on July 16, 2012 at 10:57 AM

“The private sector is doing fine.”

- Barack Obama

Good Lt on July 16, 2012 at 10:58 AM

Well, they’ll just have to hide the decline. It always works, doesn’t it?

Archivarix on July 16, 2012 at 10:59 AM

Chairman Obamasky says: Give more money to the government – payments to Food Stamps and unemployment payments are keeping the state economy buoyant!
You do not work for yourself, you work for others!

albill on July 16, 2012 at 10:59 AM

I’m not sure why Reuters expected an increase.

The side effects of chronic unicorn flatulence inhalation inverts ones sense of economic outlook, FWIW…../

ted c on July 16, 2012 at 11:00 AM

I suppose this means that Barry will accuse Mitt of being an ax murderer in addition to felon.

Philly on July 16, 2012 at 11:00 AM

Reuters notes that this will make Barack Obama’s re-election pitch more difficult

a veiled invitation to their fellow water carriers to er……..carry more water????

ted c on July 16, 2012 at 11:02 AM

I suppose this means that Barry will accuse Mitt of being an ax murderer in addition to felon.

Philly on July 16, 2012 at 11:00 AM

well, there is no way of knowing that Mitt didn’t do that, right????

/dnc

ted c on July 16, 2012 at 11:03 AM

The Great Recession continues.

rbj on July 16, 2012 at 10:52 AM

You think it’s bad now, just wait until January 1, 2013 when Taxmageddon hits.

UltimateBob on July 16, 2012 at 11:03 AM

Obama blames Bush.

The GOP blames Sarah Palin. :)

faraway on July 16, 2012 at 11:04 AM

How is this possible? Princess Nana told us that food stamps were the best way to stimulate the economy, and they are at twice the level they were under President George W. Bush!

slickwillie2001 on July 16, 2012 at 11:04 AM

Don’t worry…Obama’s Welfare Work Waiver should take care of this latest problem. Instead of wasting time looking for work, free riders will have more time to go shopping.

SheVee on July 16, 2012 at 10:57 AM

I can hear it now…….

“headed in the right direction”

“picking up steam”

“we’ve endured some pretty strong headwinds”

“economic recovery on track”

“just a bump in the road to recovery”

“not indicative of what we’d like to see”

“much better than the mess we had when we came into office”

“clearly Private equity firms like Bain Capital need to help those hurt most by these challenging economic times”

“Businesses are hoarding cash”

“The chamber of commerce and it’s republican monied interests want the economy to fail, for political gains”

…….#ughmediaspin

PappyD61 on July 16, 2012 at 11:04 AM

Damn that George W. Bush! He’s at it again!

TarheelBen on July 16, 2012 at 11:04 AM

Was the POTUS really seen spiking the ball after the report? Hmmm. Video? Anyone catch it?

sdbatboy on July 16, 2012 at 11:06 AM

Obama: “Stores need to sell more DVDs of my speeches”

faraway on July 16, 2012 at 11:07 AM

Barry Slow Jamming the Bad News!!

bayview on July 16, 2012 at 11:07 AM

Exactly, Ted. Why not accuse Mitt of having weapons of mass destruction and causing Lehman Bros. to fail. Just throw those on the pile. Barry doesn’t care to apologize for it.

Philly on July 16, 2012 at 11:09 AM

Much of this reduction is probably due to gas prices, which fell significantly in 2Q12. We’re not expecting much from the 2Q12 GDP report, but we’ll be watching the July activity reports closely. With indications of a possible China soft landing, business may be picking up again later this year.

TouchdownBuddha on July 16, 2012 at 11:14 AM

Total sales for the April through June 2012 period were up 4.7 percent (±0.5%) from the same period a year ago.

I hate Obama, but this article is stupid. Sales are up 5% from last year. That’s a good thing.

Is it a big surprise that sales in the Summer (June) are less than May?

I hope we are not turning into MSNBC.

faraway on July 16, 2012 at 11:14 AM

TPAW.

PappyD61 on July 16, 2012 at 11:15 AM

You would think Barry Campaign memorabilia are selling like hot cakes and therefore retail sale figures would go through the roof.

bayview on July 16, 2012 at 11:15 AM

Give me a:

D.
E.
F.
L.
A.
T.
I.
O.
N.

Dusty on July 16, 2012 at 11:15 AM

I am the new Touchdown Budha- reporting directly from Obama Headquarters, Cubicle 324, Chicago, IL:

“We are watching things closely. This was not unexpected. Even though all experts believed there would be a .2% increase, the fact that the actual number is a .5% DECREASE is only temporary. The real action is in Europe, where things are doing fine now. We are watching closely. We have seen some bumps in the last few months, but believe heading forward there will be increased positive economic numbers. We maintain our bullish approach and a positive economic outlook.”

AirForceCane on July 16, 2012 at 11:16 AM

Well, Obama’s kept his campaign promise to “radically transform America” — he’s transformed it back to the Great Depression, a/k/a the Democrats’ Golden Age.

Scriptor on July 16, 2012 at 11:16 AM

Obama: “Stores need to sell more DVDs of my speeches”

faraway on July 16, 2012 at 11:07 AM

I’m tellin’ya, Moochie and Bammie on a dunk tank, $1,000 a ball. Could bring in millions.

slickwillie2001 on July 16, 2012 at 11:17 AM

Wow- I actually wrote my mock Touchdown Budha post BEFORE I went back and now see the “real” Touchdown Budha had already beaten me to it..

I think I have her trolling down to a science.

You know how it is a guarantee this girl is a lib troll?

Because no real human would ever entrust their money to a person who is so consistently wrong EVERY WEEK for months on end. Not only are you a bad shill, you stink at economics!

AirForceCane on July 16, 2012 at 11:19 AM

PappyD61 on July 16, 2012 at 11:04 AM

You forgot: # Lowest jobs report in 4 years.

Red Creek on July 16, 2012 at 11:19 AM

i think these retail stores are failing because they don’t pander enough to the gay market. stupid breeders. /

GhoulAid on July 16, 2012 at 11:19 AM

Who cares…..
Bain, Bain, Bain……

angrymike on July 16, 2012 at 11:20 AM

“I wouldn’t read too much into one retail sales report…”
- a Famous Economic Illiterate

VelvetElvis on July 16, 2012 at 11:20 AM

The buck stops with you.

bbordwell on July 16, 2012 at 11:21 AM

No doubt that Obama economic super genius, the best ever in history of mankind, is due to his work as a welfare queens agitator in inner city Chicago. It is his dealing with the welfare queens, the most productive sector of our society, that gave him such a deep understanding how to create the most prosperous economic era in history of the country and the world… The era of Obama… So let all thank our Leader and Economic genius Obama for this age of super prosperity we are living in, and at the same time let us all say thank you very much to the welfare queens of Chicago, without you and without Obama interacting with you throughout most of his political life, we would not be so blessed with Obama and his great era…

mnjg on July 16, 2012 at 11:24 AM

“It is Bush’s fault!!”

B H Obama

QFT /s

Gunlock Bill on July 16, 2012 at 11:24 AM

SITRD!

vcferlita on July 16, 2012 at 11:32 AM

#doinjustfine

#stepinrightdirection

ted c on July 16, 2012 at 10:45 AM

#bakedinthecake
#youdidntcreateit

BacaDog on July 16, 2012 at 11:33 AM

Step in the right direction.
Solid B+.
Headwinds.
Racist.
BUUUUUUSSSSSSHHH!!!!

jukin3 on July 16, 2012 at 11:37 AM

TPAW.

PappyD61 on July 16, 2012 at 11:15 AM

Seems to be Drudge’s flavor of the day.

CW on July 16, 2012 at 11:39 AM

Unexpectedly. Again.

You know, I’m beginning to think that the Unicorn Theory of Economics isn’t all it’s cracked up to be.

Physics Geek on July 16, 2012 at 11:39 AM

TREND

cmsinaz on July 16, 2012 at 11:41 AM

But…but…but Barry say’s “We’re moving in the right direction!”

GarandFan on July 16, 2012 at 11:44 AM

Is the Y-Axis “Number of units Sold”?

Wine_N_Dine on July 16, 2012 at 11:44 AM

AirForceCane on July 16, 2012 at 11:16 AM

Well done.

You hit the smooth, neutral tone that the real TouchdownBuddha uses to try and reassure everyone that an Obama-inspired prosperity is just around the corner.

I must say, TDBuddha is a break from the usual “Mitt Romney eats children with caviar for breakfast!” approach of most progressive trolls.

MidniteRambler on July 16, 2012 at 11:50 AM

This is all because of the weather…

PatriotRider on July 16, 2012 at 11:53 AM

Notice the “inflation” rate the media report does not include food and fuel, the two most unavoidable expenses, which have both been going up recently. Thus causing inflation to be drastically under-reported.

But in the “retail sales” figures, food and fuel are miraculously put back in. Thus causing retail sales (in terms relevant to consumer confidence) to be drastically over-reported.

This depression is much, MUCH deeper than people are being led to believe. Even just critically and analytically reading articles (which far too few people do to begin with) isn’t enough. To correct all these figures, you’d basically have to have your own full-time team of accountants and economists rechurning all the reports. And that’s assuming there’s no fraud in the underlying government-collected data itself… which seems a rather foolish assumption to make at this point.

logis on July 16, 2012 at 12:04 PM

.5%? Technically, the foot traffic in my store has doubled, yet my per capita sale is less than half what it was during the spring. I suppose that puts me down nearly 75% since Memorial Day.

My business doesn’t exist to entertain folks or keep them cool on a hot day. I can’t handle another six months of this, let alone another four.

southsideironworks on July 16, 2012 at 12:04 PM

Retail sales fall again in June, third straight month of decline

Loyal Dems/Obummer swooners nonplussed but still Hoping for Change!

Surely His Higness needs just four more years to fix all of Boosh’s mistakes.

Dr. ZhivBlago on July 16, 2012 at 12:11 PM

I’m not sure why Reuters expected an increase.

Ed: because they are openly and shamelessly rooting for Obama… which is why I stopped paying attention to Reuters a LONG time ago…

Khun Joe on July 16, 2012 at 12:21 PM

The Romney campaign needs to remind the public that, back in the day, you could actually leave one job and find another one, tschaaaa?! Unlike present times, that is……

ted c on July 16, 2012 at 10:54 AM

You mean, leave one job and already had one lined up a week before you left the current one.

watertown on July 16, 2012 at 12:22 PM

Falling consumer confidence led to a third straight month of contraction in the retail sector, dropping 0.5% in June.

“How many billions in lost revenue will that cost me?! We need to make up for that with higher taxes. Problem solved.”-John Q. Senator

Dr. ZhivBlago on July 16, 2012 at 12:30 PM

Much of this reduction is probably due to gas prices, which fell significantly in 2Q12. We’re not expecting much from the 2Q12 GDP report, but we’ll be watching the July activity reports closely. With indications of a possible China soft landing, business may be picking up again later this year.

TouchdownBuddha on July 16, 2012 at 11:14 AM

Nice try, Touchdown, but no cigar.

I own a small retail business that has nothing to do with gas. Yet, every day, QuickBooks informs me that I am running a little under 20% behind last years sales. (Last year’s sales ended up about 25% down from 2010.)I’m darned sure not counting on business picking up later this year. In fact, I’m battening down the hatches in anticipation of finishing out 2012 25% under 2011.

catsandbooks on July 16, 2012 at 12:39 PM

catsandbooks on July 16, 2012 at 12:39 PM

ObamaCare though will help offset that loss right? I mean lower insurance sure translates into better profits for you…right? I mean that had to be the reason why they worked so hard on it instead of fixing the economy…

watertown on July 16, 2012 at 12:44 PM

With indications of a possible China soft landing, business may be picking up again later this year.

TouchdownBuddha on July 16, 2012 at 11:14 AM

Nothing says soft landing more than housing prices that are 30+ times annual income. We all know how 10 times income worked out in Japan and nearly 5 times income in the US.

MNHawk on July 16, 2012 at 12:45 PM

Who cares…..
Bain, Bain, Bain……

angrymike on July 16, 2012 at 11:20 AM

That’s the old way…

New way….
It’s Bain’s fault because of their companies that outsourced their jobs to other countries and cause fewer people to be employed here to buy stuff resulting in the downturn these last few months.

Oh also… we need government to spend more money…

/facepalm #Bain /sarc

Ronaldusmax on July 16, 2012 at 1:34 PM

ObamaCare though will help offset that loss right? I mean lower insurance sure translates into better profits for you…right? I mean that had to be the reason why they worked so hard on it instead of fixing the economy…

watertown on July 16, 2012 at 12:44 PM

It is to laugh. Himself and I got screwed, doed and tattooed by ObamaCare. For about fifteen years, Himself received free health care insurance as part of his pay from his employer, and it was pretty good insurance. About eighteen months ago, the cost of the insurance had gone so high and the company’s revenues had sunk so low that Himself was required to pay $100.00 a week for the previously free insurance. To add insult to injury, the $100.00 a week insurance has less benefits than the free insurance. Himself is now 67 and on Medicare but is still working full time and paying the $100.00 per month because I am 14 1/2 months away from qualifying for Medicare. (Not that I expect much out of Medicare after ObamaCare gets done raping and pillaging it.)

catsandbooks on July 16, 2012 at 1:37 PM

Oh btw, this means less tax revenues for the federal government.

Can anyone say the “6 Trillion dollar man” Obama?

I’d love to see that made into some kind of funny.

Ronaldusmax on July 16, 2012 at 1:37 PM

European machine tool orders for Q1 were down 11% and I doubt they’ll recover by Q3. Europe is fine, right?
President Downgrade says the ‘private sector is doing fine’ right?

Never met a journalist who understands college algebra let alone economics. Econ majors go thru the calculus sequence as a minimum.

Missilengr on July 16, 2012 at 1:40 PM

I cannot wait for when subjects related to the ECONOMY are broached in the debates. The CHA (cover his ass) monologues in support of Preezie Choombro from the talkinghead LSM will be someting to behold.

Missilengr on July 16, 2012 at 1:46 PM

catsandbooks on July 16, 2012 at 1:37 PM

I know the feeling kinda. My place has their own insurance via the company. It was not that great, but…. it covered the bad stuff, and you could get up to 80% coverage for all the other stuff as long as you stayed in the network.

Typical single coverage was 7 bucks a week.
Family was 22 bucks a week.

That was then… now it is:
Single = 33/week
Family =57/week

That and a lot of stuff that used to be covered is not anymore.

watertown on July 16, 2012 at 1:50 PM

You and I are not the only ones, Watertown. I’ve noticed over the past few years that a lot of Hot Air posters have been slapped in the face with outrageous and abrupt raises in both the cost of their health insurance and copays. But somehow, the LSM does not see fit to interview people like you and me. They only interview the people who anticipate free health insurance with no restrictions or copays.

catsandbooks on July 16, 2012 at 3:03 PM

Outside of monthly bills, we buy only what we have to have (food/medicine/fuel). Everything else we make, make do or do without.

Extrafishy on July 16, 2012 at 4:00 PM

The cover photo shows part of the reason, inflation. They used to say buy 1 get 1 free. Add to it the fact that we’re getting less stuff in same size boxes/bags, the high cost of fuel limiting unnecessary trips, (and the impulse buying that went with it) higher utility bills, higher local taxes, higher cost of loans, and lower return on investments. Not to mention stagnant wages if you’re lucky enough to not have to be looking for a job in the first place. Other than that I can’t think of any reason for this “unexpected” trend.

Gwillie on July 16, 2012 at 8:15 PM

You would think Barry Campaign memorabilia are selling like hot cakes and therefore retail sale figures would go through the roof.

bayview on July 16, 2012 at 11:15 AM

Been there, done that.

Gwillie on July 16, 2012 at 8:18 PM

Having become an advanced student of Obama’s Marxist rhetoric (most notably the successful business owner variety), I have a quote prepared for him, one that is solidly guaranteed to spur consumer spending:

“Let’s give credit where credit is not due.”

.

shaken on July 17, 2012 at 10:12 AM