Retail sales were reported this morning for June and were weak again. For the third straight month, retail sales declined, which is a reasonably rare occurrence. Since 1992, there have been 4 periods that retail sales have declined in three straight months. Two of those periods happened in 2008; one of those periods lasted for 6 months. Below is a list of negative retail sales streaks:
Looking at the bigger picture, retail sales growth has slowed to just a 3.8% y/y increase in June. The slowing trend doesn’t necessarily indicate recession, but certainly demonstrates that the rapid growth phase of the economic cycle is over. As recently as this time last year retail sales were up 9.2% y/y, but now it looks like there isn’t the same slack in the economy that there was then to generate large growth numbers.