Five-Year Retail Boom in Texas Implodes
by Wolf Richter
WolfStreet.com
February 18, 2016
The Oil Bust Bites.
Retail sales in Texas were a boom machine after March 2010, their low point during the Great Recession. It lasted over five years. Sales tax collections, reported by the Texas Comptroller of Public Accounts, jumped 46% from the first half of 2010 to the first half of 2015. Blinding growth for a mature market!
Given the size of the Texas economy, it helped prop up overall retail sales in the US.
But by mid-2015, the retail sales boom came to a screeching halt. In the second half, sharp year-over-year declines set in. And in December, over the crucial holiday period, retail sales sagged.
Sales tax collections aren’t an ideal gauge. Basic food products like flour, sugar, bread, milk, eggs, fruits, or vegetables are exempt. Taxes on motor vehicle sales and rentals are not included in this tally but are reported separately. The data is not seasonally adjusted, so it can only be compared to the same months in prior years. But it’s an unvarnished approximation of the movements of retail sales.
Sales tax collections lag sales one month. So collections reported for January were for sales in December.
June and August 2015 were the first months since March 2010 when sales tax collections actually declined year over year. They were considered outliers. Then in October, sales tax collections plunged 5.4% year-over-year. In November, collections fell 3.3%, in December 1.0%, and in January 3.9%.
Since sales tax collections lag sales one month, that 3.9% drop for January was for December sales. What a sour holiday period!
The Rest…HERE
