Retail Sales in Texas Plunge

Retail Sales in Texas Plunge
by Wolf Richter • December 14, 2015


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Retail sales in Texas, based on sales tax collections as reported by the Texas Comptroller of Public Accounts, have been booming since March 2010, the low point in the Great Recession.

Sales tax collections jumped 44% from $18.3 billion during the first 11 months of 2010 to $26.3 billion during the same period in 2015! The state government was ecstatic. Retailers were happy. People were spending money they didn’t have on things they preferably didn’t need, and in doing so, were paying lots of taxes. The state was firing on all cylinders.

Sales tax collections aren’t a perfect indicator of retail sales. Not all sales are taxable, such as food products (flour, sugar, bread, milk, eggs, fruits, vegetables, and similar groceries), though many edible goods are taxable, as are most other goods. Taxes on motor vehicle sales and rentals are in a separate category. And collections are raw data, not seasonally adjusted, so they can only be compared to data from the same months in prior years. But they’re an unvarnished approximation of the movements of retail sales.

....(snip)....

The first hint arrived in the June sales tax collections. Collections lag sales by one month. So collections reported in June were on sales that occurred in May. And those collections, instead of rising on a year-over-year basis, as they’d done every June since 2009, suddenly fell 1.4%.

It broke the perfect trend of year-over-year increases every month since the low point in March 2010. But in July they rose again. Then in August, they fell 0.4%. Something was amiss. But in September, sales tax collections rose again, and observers breathed a collective sigh of relief. It had just been a brief dip.

But then came the October collections: they plunged 5.4% year-over year; and now November collections that fell 3.3%. Two months in a row of declines; four months of the last six, and the first declines since the Great Recession low of March 2010. ......................(more)

http://wolfstreet.com/2015/12/14/retail-sales-in-texas-plunge/