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RAPAPORT... U.S. jewelry and watch sales across all channels were flat in May, up just 0.4 percent year on year, at $7.1 billion as estimated from preliminary government figures. According to Rapaport News calculations, jewelry sales rose a touch, up 0.5 percent, to $6.3 billion, while sales of watches fell 0.7 percent to $831 million during the month. Even though estimates were largely unchanged from May 2014, the very slight improvement broke a seven-month streak of sales declines for the sector.
Jewelry and watch sales for the first five months of the year have decline 0.6 percent year on year to $28.7 billion, according to Rapaport News estimates. Jewelry sales have fallen 0.5 percent to $25.4 billion, but watch sales have weighed more on the sector, contracting 1.9 percent to $3.4 billion.
Meanwhile, sales just from U.S. specialty jewelry stores for the first four months of the year have registered a more severe decline, falling 4.7 percent year on year to $8.5 billion. Totals for the month of May are scheduled for release on July 14.
Advanced sales estimates for May at U.S. department stores continued to slide, falling 3.2 percent year on year to $13.6 billion. But weak consumer spending also permeated across the retail and food sector -- excluding motor vehicles and auto parts -- as sales were flat at $364.03 billion. Retail trade sales improved 2 percent. Nonstore retail sales rose 6 percent to $37.681 billion.
Lindsey M. Piegza, the chief economist for Stifel, said that consumer spending rose more than expected in May, registering a month-to-month gain of 0.9 percent, the largest monthly increase in almost six years. "On a three-month annualized basis, consumer spending is up 4 percent, on par with the pace at the end of last year," she said in a note to clients.
In all, a "much more favorable picture" is emerging of the U.S. consumer and if May's momentum continues, the gross domestic product is positioned to outpace Stifel's projection of under 2 percent growth. "However, even with an above trend growth rate from April to June, coupled with a a 0.2 percent decline across the first three months of the year -- as reported yesterday in the third round revision -- first-half growth will remain a disappointment," she said. Consumption is only averaging growth of just 0.2 percent over the past six months, which is not an impressive trend, Piegza noted.
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