Consumer Spending Basket Changes In March, More on Gas, Less on Amazon

Advance Retail Sales from Commerce Department, chart by Mish

Advance Retail Sales Additional Month-Over-Month Comparisons

Advance Retail Sales from Commerce Department, chart by Mish

Advance Retail Sales Details

  • Advance estimates of U.S. retail and food services sales for March 2022, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $665.7 billion, an increase of 0.5 percent from the previous month, and 6.9 percent above March 2021.
  • Total sales for the January 2022 through March 2022 period were up 12.9 percent from the same period a year ago.
  • The January 2022 to February 2022 percent change was revised from up 0.3 percent to up 0.8 percent. Retail trade sales were up 0.4 percent from February 2022, and up 5.5 percent above last year.
  • Gasoline stations were up 37.0 percent from March 2021, while food services and drinking places were up 19.4 percent from last year. 

Key Chart Points 

  • Total Sales: +0.5% 
  • Gas Station Sales: +8.9%
  • Nonstore Sales (e.g. Amazon): -6.4%
  • Motor Vehicles and Parts: -1.9%
  • Excluding Motor Vehicles: +1.1%
  • Excluding Motor Vehicles and Gas: +0.2%
  • Food Stores: +1.0%
  • Food Service: +1.0%

Consumers spent but that is quite a shift away from Amazon and vehicles towards more on gas. 

These numbers are not adjusted for inflation. This was not robust spending despite the overall jump of 0.5 percent.

CPI Rips Higher to 8.5 Percent From a Year Ago, the Most Since 1981

For discussion of the CPI, please see CPI Rips Higher to 8.5 Percent From a Year Ago, the Most Since 1981

As a result of surging inflation, Real Hourly Wages Dive Again in March, Negative for 13 of Last 15 Months

Please note Inflation Has Eaten Up Nearly 100 Percent of Hourly Wage Gains Since 1973

Expect more spending changes as the Fed hikes and home sales plunge. There will be a big decline in demand for appliances, paint, landscaping, and furniture. 

Q: What will merchants do with all the inventory they ordered with more on the way?
A: Think discounts 

Other than rents, peak inflation year-over-year may be in.

This post originated at MishTalk.Com.

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cm955679
cm955679
1 year ago
Yes I have read in many articles about this. Actually consumer services are on increasing day by day after COVID-19. In COVID times, markets were on the bottom of graph in the decade, but after opening the lockdown, consumer services are on boom in USA. Today I read an article on consumer services jobs: link to mytechmarvel.com and you can get an idea how these services are growing now. I think most of the employment in USA give by the consumer jobs. Really I’m surprised of seeing the number of jobs and companies.
Jojo
Jojo
2 years ago
Speaking of food, terrific Politico investigation here:
————
The FDA’s Food Failure
A POLITICO investigation based on more than 50 interviews
finds the FDA is failing to meet American consumers’ expectations on food
safety and nutrition.
By Helena Bottemiller Evich
04/08/2022

By the time FDA officials figured out it was spinach that
was making people sick in 10 states – sending three people into kidney failure
– it was too late. It was mid-November 2021 and the packaged salad’s short shelf
life had passed. There was no recall. By the time FDA officials got inspectors
on the ground, spinach season was over. The fields and the production
facilities were empty, which made it impossible to pinpoint the source of
contamination.

Whatever caused the outbreak was likely never fixed.

This wasn’t supposed to happen. It’s been more than 11 years
since Congress passed a sweeping food safety law designed to prevent this type
of health risk. In that time, FDA has failed to put in place safety standards
for the water used to grow fresh produce, as mandated by that law, despite
knowing that water is one of the main ways fresh fruits and vegetables become
contaminated with deadly pathogens. Congress has ramped up FDA funding over the
past decade, but deadly outbreaks keep happening and it often takes the agency
too long to respond.

Many consumers would be surprised to learn this anemic, slow
response is typical for an agency that oversees nearly 80 percent of the
American food supply, but slow is what insiders in Washington have come to
expect from FDA, regardless of administration. A monthslong POLITICO
investigation found that regulating food is simply not a high priority at the
agency, where drugs and other medical products dominate, both in budget and bandwidth
– a dynamic that’s only been exacerbated during the pandemic. Over the years,
the food side of FDA has been so ignored and grown so dysfunctional that even
former FDA commissioners readily acknowledged problems in interviews.

“The food program is on the back burner. To me, that’s
problem No. 1,” said Stephen Ostroff, who twice served as acting commissioner
of FDA, and held several other senior roles at the agency, most recently as top
food official. When POLITICO called Ostroff for this story, he was so eager to
discuss the agency’s problems, he prepared a laundry list of his concerns.

“There are a lot of things that languish,” Ostroff said.
“There’s nobody really pushing very hard to get them done in the same way that
you’re pushing very hard to get the Covid vaccines out there and authorized. We
don’t have that imperative and that pressure to actually make things happen on
the food side of the Food and Drug Administration.”
….
link to politico.com

Doug78
Doug78
2 years ago
This is why world leaders do what they do.
FromBrussels
FromBrussels
2 years ago
…..a ‘Jacksons’ song pops up in my mind : don t blame it on the sunshine, don t blame it on the moonlight ….blame it on Russiaaa ….
Zardoz
Zardoz
2 years ago
Reply to  FromBrussels
Decadent Americanski dreck! I’m shocked, comrade!
Tony Bennett
Tony Bennett
2 years ago
Business margins will be squeezed. Q1 might be peak earnings for a while. Labor costs a worry.
“Labor costs and shortages have been cited by the highest number companies in the index to date as a factor that either had a negative impact on earnings or revenues in Q1, or is expected to have a negative impact on earnings or revenues in future quarters. Of these 20 companies, 13 (or 65%) have discussed a negative impact from this factor. After labor shortages and costs, COVID costs and impacts (12) and supply chain costs and disruptions (12) have been discussed by the highest number of S&P 500 companies.”
Tony Bennett
Tony Bennett
2 years ago
Bonds (mortgages) getting hammered today.
Housing in the process of sinking.

The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for March 2022 shows mortgage applications for new home purchases decreased 5 percent compared from a year ago. Compared to February 2022, applications increased by 10 percent. This change does not include any adjustment for typical seasonal patterns.

“Mortgage applications for new home purchases increased in March, which is consistent with typical seasonal trends and a sign of strong underlying demand for housing,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Potential buyers have increasingly looked to new homes as an option, given the lack of existing homes for sale. The average loan size continued to set record highs and reached $436,151. Growth in applications for larger loans continued to dominate application activity.”

Added Kan, “MBA’s estimate of new home sales declined for the fourth consecutive month, with activity down 5 percent compared to February. Elevated home prices, rapidly increasing mortgage rates, and higher costs and supply shortages for building materials are all affecting sales growth.”

MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 752,000 units in March 2022, based on data from the BAS. The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.

The seasonally adjusted estimate for March is a decrease of 4.9 percent from the February pace of 791,000 units. On an unadjusted basis, MBA estimates that there were 74,000 new home sales in March 2022, a increase of 12.1 percent from 66,000 new home sales in February.

Zardoz
Zardoz
2 years ago
Reply to  Tony Bennett
Seeing 7 or more houses a day listed locally, last year this time would see that many in a week. They’re still selling, but it looks like there’s a bit of a rush to the exits now. The Outbid should be depleted at some point.
Captain Ahab
Captain Ahab
2 years ago
“Q: What will merchants do with all the inventory they ordered with more on the way?
A: Think discounts”
LMAO. This was predictable in the middle of 2021, with confirmation around November/December, 2021. The herd mentality precludes critical thinking about the fundamentals driving the economy.
BTW, people still squawking about more housing construction to increase supply, and lower rents/prices should look at household formation rates, and the relative (in)ability to adjust inventory (+/-) in the short term. As interest rates resume ‘normal’ levels (inflation+real rate+ risk premium) there will discounts all over, exacerbated by ‘over-regression’ to the mean. This is not to say that some markets will not remain ‘warm’, even ‘hot’. Real estate is location, location, location for the simple reason, YOU CAN’T MOVE IT.
Tony Bennett
Tony Bennett
2 years ago
“Expect more spending changes as the Fed hikes and home sales plunge. There will be a big decline in demand for appliances, paint, landscaping, and furniture.”
Not only that, but as economy opens back up from covid mandates consumer will transition from buying goods (pretty much all they spent on in 2020 + first half of 2021) to services (restaurants, concerts, sports, disney world, etc)
Captain Ahab
Captain Ahab
2 years ago
Reply to  Tony Bennett
Some service demand might never recover. For example, people have settled into working at home, and many would prefer it if possible.
Tony Bennett
Tony Bennett
2 years ago
Reply to  Captain Ahab
For some new habits developed past 2 years.
I doubt my wife and I will ever eat out as much.
Maximus_Minimus
Maximus_Minimus
2 years ago
The title suggested the BLS adjusted its consumer CPI basket to reflect what people actually buy or gasp…rebalance towards necessities.
My naive wishful thinking.
Tony Bennett
Tony Bennett
2 years ago
“What will merchants do with all the inventory they ordered with more on the way?”
And order they did. Setting aside the false demand signals (one time stimulus driven demand bump) business faced two problems past 2 years 1) shortage of product … if available they order … because if they waited till they actually needed it … might not be there 2) prices increases … virtually every business facing issue … order now before price increase … in some cases substantial increases.
An example: working with a client and did not have current price list on that particular product. Gave them an air quote guessing on 8% to 10% increase. After touching base with wholesaler. +54%! Ouch.
Maximus_Minimus
Maximus_Minimus
2 years ago
Reply to  Tony Bennett
And that inflation fear induced strategic buying likely drives part of consumer spending.
Zardoz
Zardoz
2 years ago
To say nothing of the nuclear Armageddon bogeyman that suddenly popped back out of the closet. Can’t spend it when you’re ashes.
Captain Ahab
Captain Ahab
2 years ago
Reply to  Tony Bennett
I blame the gov’t giveaways less, although still a factor. Mostly, an inability to understand the effect of a recovery on demand/supply. Pent-up demand, inventory rebuilding, plus normal demand = what business saw. Add in a safety factor and shipping delay issues, and orders skyrocketed.

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