30/9/2014: Have Irish Retail Sales 'regained growth momentum' in August?

Yesterday, CSO released latest data on Retail Sales in Ireland for August 2014, prompting some media reports that the data is showing the "retail recovery gaining momentum".

Here is the actual data for core retail sales (ex-motors):

• Value of retail sales rose 0.1% m/m in August, down from 0.2% growth in July. This implies loss of the momentum in value of sales, not a gain.
• Volume of retail sales rose 0.29% m/m in August, up on -0.1 loss in July, implying regaining of the momentum m/m in volume of sales.
• Value of retail sales rose 2.22% y/y in August after posting 1.22% gain in July, implying some improved momentum y/y.
• Volume of retail sales rose 3.64% y/y in August after posting a rise of 3.21% in July, again implying some improved momentum y/y.
• 3mo average through August 2014 rose 1.9% for value of sales compared to the same period a year ago and 3.6% for volume of sales. Both rates of growth were lower than those recorded for the 3mo period through May 2014, representing a slowdown in the momentum, not a gain.

All of the above evidence suggests that retail sales are bouncing along the established trend and are not consistent with a claim that there has been sustained gains in retail recovery in August. Charts below illustrate this conclusion:

Chart above shows that Volume of retail sales index is trending along with established long-term trend. A gain in momentum would imply the index pushing steeper up relative to trend. Value of sales index is now running at a flatter upward momentum than long term trend implies. This supports the view that retail sales recovery has lost recovery momentum (but did not lose recovery overall) in Value terms and is running at zero change to the momentum (which is still positive) in Volume terms.

The conclusion above is confirmed by looking at /y/y growth rates in both series: since April 2014 jump in retail sales, both Volume and Value growth rates have fallen. Value growth has continued to trend down after May and Volume growth trended down from June.

Once again, we have positive growth in the series, but the momentum in this growth is either zero or negative, certainly not positive.