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December Was Another Retail Sales Disaster, Even Worse With Negative Revisions

December retail sales were much worse than expected. November was revised heavily lower as well.
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Retail sales from commerce department, chart by Mish

Retail sales from commerce department, chart by Mish

Advance Retail Sales

Today, the Commerce Department released Advance Retail Sales Data for November.

  • Advance estimates of U.S. retail and food services sales for December 2022, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $677.1 billion, down 1.1 percent (±0.5 percent) from the previous month, but up 6.0 percent (±0.7 percent) above December 2021. 
  • Total sales for the 12 months of 2022 were up 9.2 percent (±0.4 percent) from 2021. Total sales for the October 2022 through December 2022 period were up 6.7 percent (±0.5 percent) from the same period a year ago. 
  • The October 2022 to November 2022 percent change was revised from down 0.6 percent (±0.5 percent) to down 1.0 percent (±0.2 percent). 
  • Retail trade sales were down 1.2 percent (±0.5 percent) from November 2022, but up 5.2 percent (±0.7 percent) above last year. 
  • Nonstore retailers were up 13.7 percent (±1.1 percent) from December 2021, while food services and drinking places were up 12.1 percent (±2.8 percent) from last year.

The key phrase in the report is "adjusted for seasonal variation and holiday and trading-day differences, but not for price changes."

Retail sales took a seasonally-adjusted 0.6 percent dive in November. Every major category except food and food service declined.

Spotlight on Food

Advance Retail Sales Month-Over-Month 2022-12 Part 2

Last month people spent less on gas and more on food. This month consumers did not even spend more on food. 

Check out department stores down a whopping 6.6 percent. General Merchandise was down 0.8 percent, That category includes Walmart and Costco. 

And consumers spent 0.9 percent less eating out.

Spotlight Motor Vehicles

Motor vehicles and parts sales declined 1.2 percent following a 2.6 percent decline in November.

What happened to that alleged pent up demand for autos due to part shortages?

Month-Over-Month Advances and Declines

  • Food Service: -0.9 percent
  • Food Stores: +0.0 percent
  • Gas Stations: -4.6 Percent
  • General Merchandise: -0.8 Percent
  • Excluding Motor Vehicles and Gas: -0.7 Percent
  • Excluding Motor Vehicles: -1.1 Percent
  • Nonstore (Think Amazon): -1.1 Percent
  • Motor Vehicles: -1.2 Percent
  • Department Stores: -6.6 Percent

Retail Sales vs Bloomberg Econoday Consensus

Chart from Bloomberg Econoday

Chart from Bloomberg Econoday

 Not to worry, Janet Yellen and president Biden are bragging about how well the economy is doing.

Advance Retail Sales Details

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Advance Retail Sales Detail 2022-12

It seems consumers hit the brick wall in October.

Real vs Nominal Sales

Real vs Nominal Advance Retail Sales 2022-12

Key Real vs Nominal Points

  • Nominal Retail Sales peaked in October of 2022.
  • Real sales peaked in March of 2021 with a secondary peak in April of 2022.
  • It's real sales, no nominal, that drives GDP

Fed and Congressional Stimulus Explained

Real vs Nominal Advance Retail Sales Long Term 2022-12

Understanding Inflation

  • The Fed held interest rates too low too long.
  • Biden did a reckless final round of fiscal stimulus
  • Biden's eviction moratoriums put additional money in people's pockets.
  • Supply chain disruptions and the war in Ukraine added to the mix.
  • Then finally, consumers did a sudden switch from goods to services.

Economists are still struggling to understand inflation. What is it about that chart they fail to understand?

Screaming Recession

Take a look at real retail sales. They scream recession.  Even nominal sales are in serious decline.

How Long Will High Inflation Persist? 

For discussion, please see How Long Will High Inflation Persist? What Happened to the Great Moderation?

This post originated at MishTalk.Com.

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