US retail sales

With the recent CPI data I have updated my retail sales graphics.  Takeaways?

  1. Sales growth is slowing but no recessionary conditions;
  2. Weak historical growth profile held up by motor vehicles and parts sales;
  3. Motor vehicle and parts sales held up by consumer credit growth;
  4. Points 2 and 3 slowing;
  5. While personal disposable income has exceeded retail sales growth of late, cumulative historic relationship remains weak;
  6. Consumer credit growth to income relationships strained;
  7. Population growth weak in historical context;
  8. Current cycle lacking in typical wage growth spike

And the graphs:

Sales growth is slowing, but no “real” sign of recessionary conditions:


Annual growth rates are buoyed by weak data a year ago and while by no means strong compared to prior cycles are not, at this metric, exhibiting the kind of weakness you would ordinarily be worried about:


But as I have been pointing out for some time, retail sales strength has been supported by motor vehicles and parts sales, itself fuelled by consumer credit growth:


But motor vehicle and parts sales have been slowing over the last six months:


And consumer credit as a % of personal disposable income keeps on rising:


And relative to income growth is currently at all time highs: image_thumb5

And yes, of late disposable income has moved ahead of retail sales growth and many question why consumers are not spending savings from commodity price declines:


But we can see that cumulative growth in personal disposable income remains well below pre crisis levels: cumulative increase in food sales less cumulate increase in personal disposable income is negative:


And of course, of late, consumer credit growth has taken a step back:


Population growth likewise:


And we have lacked a spike in wage growth:


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