The string of weak retail sales reports in the first four months of 2015 are not an indication of slowing overall economic activity. Instead, recent weakness in the retail data merely reflects the steep fall in sales at gasoline stations since November 2014. In our pic-of-the-week, retail sales minus gasoline station sales continues to show a very steady uptrend, even in the most recent data.
Gasoline station sales are off by about $10 billion per month since late last year, falling from about $46 billion per month to only about $36 billion per month currently. This is a more than 20% decline in the sector.
Gasoline station sales are a major component of total retail sales and can easily sway overall retail numbers. Gasoline station sales have declined from a roughly 11-12% share of total retail sales in the 2011 to 2014 period to only 8.2% as of the April 2015 retail report.
If you are wondering if gasoline station sales are masking weakness in other retail sectors, the answer is no. Nearly every other major retail sector is currently posting solid year-over-year gains.
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