by Calculated Risk on 6/13/2007 02:56:00 PM

From the Census Bureau: Advance Monthly Sales for Retail Trade and Food Services

"The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for May, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $377.9 billion, an increase of 1.4 percent (±0.7%) from the previous month and 5.0 percent (±0.7%) above May 2006."

Click on graph for larger image.

This graph shows the nominal and real YoY changes in retail sales (excluding food service). Note: real prices are adjusted using the PCE deflator, and are estimated for May.

This is a series with significant volatility month-to-month, and May was an up month, but the trend still apprears down. I'd need a few more up months to change my view of the trend for retail sales.

The reporting for May is misleading. Like this article from the AP: Retail Sales Surge 1.4 Percent in May

Consumers brushed off rising gasoline prices and slumping home sales to storm the malls in May, pushing retail sales up by the largest amount in 16 months.

Yes, the advance sales estimate was up strongly in May, but does anyone care that the month-to-month volatility was the greatest, on the upside, in "16 months"? YoY real retail sales are up just over 2%, and that is still weak. As I've noted before, I expect Q2 GDP to be stronger than Q1, but I'm not so sanguine for the 2nd half of the year.