This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Soft Retail Sales Report Points to Stop-Start Economy, More Low Interest Rates

NEW YORK (TheStreet) -- The retail sales number is soft all over -- no really terrible details, but none that hold many clues to where the next stage of the expansion will come from either.

The Census Bureau said May retail sales rose 0.3% -- missing forecasts of 0.6% growth. April sales were revised upward, to 0.5% growth instead of 0.1% as originally reported. And category results were mostly kind of in-between, with the notable weak points being restaurant sales and the latest drop in department store sales.

The basic picture of the consumer doesn't change much. People are still shopping for things that either suggest they are buying houses or renovating them, with home-improvement store sales rising 1.1% and furniture up 0.5%, offset partly by a 0.3% dip in electronics and appliances.

The 0.2% drop in restaurant sales is the closest thing to suggesting that consumer confidence has flagged at all, but the 1.5% gain in autos, the latest in a 12-month jump totaling 11.1%,, seems to cancel out that analysis.

Big, bad numbers came from a decline in grocery store sales and clothing sales. But clothing is too small a category to matter much, and a 0.1% dip in food sales isn't going to worry policy makers much.

The takeaway is that the Federal Reserve basically has it right: The economy is still soft enough to be well into easy-money territory, if perhaps not as easy as last year. There's nothing here that points to any acceleration -- in activity, in prices, in consumers' urgency.

Now that two months of second-quarter data are in, there's not much that points to consumer spending busting out of a range slightly above 3% annual growth -- the range that policy makers already expect.

No surprises means no change in interest rates. That the only surprise you can tease out of today's numbers is negative -- even though it's not huge -- just reinforces the point that Janet Yellen & Co. are going to leave rates low well into next year. If anything, data like this may suggest that the second-quarter acceleration won't be sharp enough to stir what few near-term inflation fears the Fed may still hold.

Apple Is Regaining Its Momentum After the Stock Split

Why Amazon Loves Local and Why It Absolutely Shouldn't

Tim Mullaney writes on economics, health care and technology , Follow him on Twitter @timmullaney or contact him at

At the time of publication, the author held no positions in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

Tim Mullaney was national economics correspondent for USA Today from 2011 to 2014, and writes about economics, health care and technology. You can reach him at and follow him on Twitter @timmullaney.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.64 -0.11%
FB $118.57 0.84%
GOOG $698.21 0.75%
TSLA $241.80 0.43%
YHOO $36.53 -0.19%


Chart of I:DJI
DOW 17,891.16 +117.52 0.66%
S&P 500 2,081.43 +16.13 0.78%
NASDAQ 4,817.5940 +42.2360 0.88%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs