Consumers rise again after July respite.
Please consider the Census Department report on Advance Retail Sales for August 2026.
Advance estimates of U.S. retail and food services sales for August 2026, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $773.9 billion, up 1.2 percent (±0.4 percent) from the previous month, and up 6.0 percent (±0.5 percent) from August 2025.
Total sales for the June 2026 through August 2026 period were up 6.0 percent (±0.5 percent) from the same period a year ago.
The June 2026 to July 2026 percent change was revised from down 0.6 percent (±0.4 percent) to down 0.5 percent (±0.2 percent).
The key phrase above is “adjusted for seasonal variation and holiday and trading-day differences, but not for price changes.”
The report only lists nominal sales, not real (inflation-adjusted sales). It’s real sales that feed GDP.
Month-Over-Month Nominal Retail Sales
- Total: 1.2 percent
- Excluding Motor Vehicles: 1.4 percent
- Excluding Motor Vehicles and Gas: 1.2 percent
- Motor Vehicles: 0.6 percent
- Nonstore Sales: 2.6 percent
- Food Service: 1.2 percent
- Food Stores: 0.4 percent
- Gas Stations: 3.1 percent
- General Merchandise: 0.7 percent
Real vs Nominal Retail Sales Month-Over Month Percent Change
- Nominal Total: 1.2 percent
- Real Total: 0.8 percent
The CPI was up 0.4 percent. Subtract that from nominal sales to get real sales.
Real vs Nominal Advance Retail Sales percent Change from Year Ago
Nominal sales are up 6.0 percent from a year ago. Real sales are only up 2.6 percent.
The difference is the inflation gap, currently 3.4 percentage points out of 6.0.
Thus, inflation accounts for 57 percent of the increase in nominal retail sales from a year ago.
Real vs Nominal Retail Sales in Millions of Dollars
There was a massive surge in inflation in 2020 and 2021 with three rounds of largely unwarranted and definitely excessive rounds of fiscal stimulus under Trump and Biden.
Trump wanted more fiscal stimulus than Congress gave him. Then Democrats went totally nuts under Biden.
The Fed compounded this error with ridiculous QE lowering mortgage rates and putting still more money into people’s pockets.
The Fed has never admitted this error.
Real vs Nominal Retail Sales Detail
Real vs Nominal Sales Notes
- Real retail sales peaked in March of 2021 at 233,440. They are now 231,630 That’s a decline of 1,190 or 0.5 percent.
- In March of 2021, nominal sales were 603,581. They are now 773,947. That’s an increase of 170,366 or 28.4 percent.
Over 100 percent of the increase in retail sales since March of 2021 is due to inflation.
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