What’s The Key Take-Away From Today’s Retail Sales Number?
Today’s retail sales report confirms that consumers continue to spend despite
any notable growth in the broad job market. The report, released by the Commerce
Department, posted a .1% increase in May from April’s .3% decline (excluding
gasoline, the number was actually up .6% from -.9% in April). But most of the
growth came from two components of the report:
- Electronics and Appliances had their strongest month since November, 2001
( when the 9-11 attacks caused demand to build up, as consumers postponed
making purchases), and came in at 2.9% from April. - The furniture and home furnishings component grew by 1.1% in May from .5
in April, posting a third straight month of growth.
So what is the take-away here?
We can expect May new home sales to post another month of growth when the
figures are released later this month, as the strength in the two components
mentioned above are directly the result of the housing market–unless home
purchasers are big fans of minimalist interior decoration, they need to populate
their houses with furniture and appliances, right.
The chart below shows the high correlation between the furnishings component
in retail sales and new home sales.
