Retail sales – the reports have mostly been good. I reviewed the strong Empire Fed reading in a previous article, now let’s look at the great July retail sales report. The bad news is the June reading was revised lower and the good news is the July reading beat estimates. This means Q2 GDP could be revised lower and the estimates for Q3 GDP increased. I will take that tradeoff as the most recent data is the most useful in making economic forecasts.

As you can see from the chart below, month over month headline retail sales were up 0.5% in July which beat estimates for 0.1% growth. The highest estimate was for 0.3% growth. June retail sales were revised lower from 0.5% to 0.2%.

Month over month retail sales excluding autos were up 0.6% which beat estimates for 0.4% growth. June’s reading was revised from 0.4% growth to 0.2% growth. Excluding autos and gas, retail sales were up 0.6% month over month which beat estimates for 0.4% growth. The highest estimate was 0.5% growth. June’s reading fell from 0.3% growth to 0.2% growth.

The control group reading was the worst part of the report in June. It was revised down from no month over month growth to a 0.1% decline. This metric was up 0.5% in July which beat estimates for 0.4% growth.

As you can see from the chart below, control group retail sales were up 5% year over year.

Retail Sales – This is one of the best reports of this cycle as the peak was 5.9% growth in July 2011.

Auto sales were up 0.2% in July, but they were revised lower from 0.9% growth to 0.1% growth in June. Restaurant sales growth was up 1.3% after increasing 1.6% and 2.8% in the prior 2 months.

E-commerce sales were up 0.8% in July and 0.7% in June. In Q1 online retail sales were 9.46% of total retail sales. If online growth continues to beat overall sales growth, that metric should get to 10% by the end of the year.

Gas sales are going to start to be negatively affected by prices on a month over month basis as oil is down 7 weeks in a row. Gas sales were up 0.8% month over month because of the summer driving season.