With that in mind, this morning’s retail sales report in some ways just confirmed something we already knew. Although auto sales slid 1% month-over-month, that was likely thanks to the fact that in June, autos posted their biggest gain since November 2012.
Plus, the raw annualized sales rate for June and July meant the strongest back-to-back reading since back in 2007, according to Bloomberg. And year-over-year, sales at auto dealers improved by 13.3%.
The real good news, though, is that the optimism doesn’t end with autos this time around.
In June, the overall retail sales number was mostly driven by auto sales and higher gas prices. But excluding those categories and building supplies, the core number posted its weakest gain of the year: 0.2%.
And that gain was revised down to 0.1% in yesterday’s report.
In July, though, the core number gained 0.5% — better than expectations and the biggest gain since December.
The weakness in June could have simply given the core sales number a low bar for a big gain. But the opposite might have held true for overall July retail sales, too. The overall number — including gas, autos and materials — climbed 0.2% month-over-month, while the median forecast was for a 0.3% gain. At the same time, though, June’s overall retail sales number was revised up by 0.1 percentage point, providing a slightly higher base for the month-over-month comparison.
So July’s overall sales might have been a technical miss, but that shouldn’t keep you up at night.
Even narrowing in on the retail part of retail sales, clothing and accessory stores sold 0.9% more than they did in June — not bad considering some analysts have been increasingly bearish about the sector.
A few spot signs of weakness should be noted, though. Spending at electronics and appliances stores and department stores fell year-over-year — sorry, Best Buy (BBY) and JCPenney (JCP) — and furniture stores cooled off a bit since June.
Still, all in all, that’s a month’s worth of data we can be optimistic about.
As of this writing, Alyssa Oursler did not hold a position in any of the aforementioned securities.