'Weak' Retail Sales? Someone Forgot to Tell Shoppers

"Catastrophe!" "Disaster!" "Mayhem in the Mall!" These aren't (quite) the actual headlines that mainstream media outlets typed up to describe recent retail sales statistics, but they pretty much capture the mood.

In the pages of The Wall Street Journal, for example, we saw a Technicolor depiction displaying the rise and fall (mostly fall) of American retailers:

• Car sales: down 0.6% in June.
• Electronics and appliances: down 0.8%.
• Sporting goods, books, and hobbies: down, down, and downer -- 1.6%.
• And incredibly in a vacation season, gasoline sales: down 1.8%.

In fact, about the only sector of the retail economy that showed any improvement at all was the ambiguously named "nonstore" category (read: tax-free purchases from Amazon.com (AMZN) and its Internet cohorts). Those were up 0.5%, as shoppers swarmed online in search of bargains. But is it really as bad as it sounds? Have Americans stopped shopping? Have the terrorists finally won?

Not necessarily, no.

You see, it's really all a matter of perspective. The Journal, and the rest of the mainstream press, focused last week primarily on the comparisons between June sales figures and those of May. And to an extent, that makes sense, because it fits nicely into the story of a three-month trend of sequential sales slippage. (And incidentally, works well with reporters prognosticating on how short-term trends in the economy might affect results in the upcoming election).

Lost in the obsession with short-term navel-gazing, though, is a little-noticed fact that the Journal noted in passing, but gave little ink to: When you compare retail sales trends today to what they looked like one year ago -- what folks in the investment industry refer to as year-over-year comparisons -- things aren't looking grim at all. In some cases, in fact, they look downright fantastic.

Trees, Meet Forest

Take a look for a moment at how sales results for June 2012 compare to June 2011's numbers, and compare them to the more headline-grabbing, short-term numbers noted above. See if you can spot the difference:

• Car sales: up 7.3% in 2012.
• Electronics and appliances: down 1% (so no, it's not all wine and roses...).
• Sporting goods, books, and hobbies: up 4.4%.
• And gas? Up only 0.1% -- which when you look at it from a car owner's perspective, isn't bad news at all.

And that's not all. June building and garden supplies, indicative of the health of the housing market, are up a modest 0.6% over 2011 levels. Restaurant and bar receipts have risen 6.3%. And in confirmation of a truly long-term economic trend, that murky "nonstore" category, which, as we've seen, refers to Internet sales, is positively jumping, up a whopping 10.9% compared to June of last year.

Viewed in this light, things actually don't look half bad for the economy. Yes, in the short term, we do appear to be seeing some weakness in retail sales over the past few months. But maybe that shouldn't surprise us. There's a lot of uncertainty in the economy right now, not least the question of who's going to be sitting in the White House a year from now, whether he'll be picking up the tab for our health care, and how much he'll be picking our pockets to pay for it.

In just a few short months, American shoppers will head to the polls to vote on whether they feel they are, or are not, better off now than they were four years ago. One thing's for certain, though: If you look at the numbers correctly, retail numbers are certainly better today than they were one year ago.

The headlines notwithstanding.


Motley Fool contributor Rich Smith holds no position in any company mentioned. But last month, he did buy a new SUV, boosting U.S. automotive sales figures and goosing gasoline retail receipts in one fell swoop. The Motley Fool owns shares of Amazon.com and Motley Fool newsletter services have recommended buying shares of Amazon.com.