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Retail Sales Flounder in May With Negative Revisions in April

The advance retail sales numbers for May were negative for the month and the Commerce Department revised April slightly lower.
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Advance Retail Sales data from Commerce Department, chart by Mish

Advance Retail Sales data from Commerce Department, chart by Mish

Advance Sales Notes

  • Advance Estimates of U.S. Retail and Food Services Advance estimates of U.S. retail and food services sales for May 2022, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $672.9 billion, a decrease of 0.3 percent from the previous month, but 8.1 percent above May 2021. 
  • Total sales for the March 2022 through May 2022 period were up 7.7 percent  from the same period a year ago. 
  • The March 2022 to April 2022 percent change was revised from up 0.9 percent to up 0.7 percent (±0.2 percent).  

The key words above are "but not for price changes." The chart represents nominal, not real (inflation-adjusted) numbers. It's real sales that will influence GDP. 

I have some "Real" charts below. First, here is a look at more nominal numbers.

Advance Retail Sales data from Commerce Department, chart by Mish

Advance Retail Sales data from Commerce Department, chart by Mish

Advance Retail Sales Detail 

Advance Retail Sales data from Commerce Department, chart by Mish

Advance Retail Sales data from Commerce Department, chart by Mish

Advance Retail Sales Major Categories 

Advance Retail Sales data from Commerce Department, chart by Mish

Advance Retail Sales data from Commerce Department, chart by Mish

Declining Sales 

  • Total
  • Nonstore (e.g. Amazon)
  • Motor Vehicles 

Advancing Sales 

  • Food and Drinking
  • Gasoline 
  • Clothing
  • Department Stores

Consumer Shift 

  • Gasoline has the biggest jump in net month-over-month sales, by far.
  • Food and Drinking had the second largest increase.
  • Motor vehicles and parts had the biggest decline.
  • Nonstore sales had the second biggest decline. 
  • Consumers spent 4 percent more on gas and 0.7 percent more on food service.
  • Consumers spent 1 percent less on nonstore sales, and 3.5 percent less on motor vehicles and parts. 
  • Excluding motor vehicles and gas, sales were up a mere 0.1 percent in nominal terms.

Real vs Nominal Retail Sales 

Data for both series downloaded from St. Louis Fed. Chart by Mish

Data for both series downloaded from St. Louis Fed. Chart by Mish

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That chart is a straight-up data download, no Mish calculations. The CPI index is 1982-1984. 

We would get a different chart adjusted for PCE rather than CPI, and yet another chart if we used a GDP deflator. 

We do not have a PCE adjustment for May and the BEA will concoct a GDP deflator on the fly for the next GDP report months from now. 

Real vs Nominal Retail Sales 

Real vs Nominal retail sales since 2020, data from Commerce Dept via St. Louis Fed, chart by Mish

Real vs Nominal retail sales since 2020, data from Commerce Dept via St. Louis Fed, chart by Mish

Real Retail Sales

Real retail sales since 2021, data from Commerce Dept via St. Louis Fed, chart by Mish

Real retail sales since 2021, data from Commerce Dept via St. Louis Fed, chart by Mish

Real retail sales topped the very month consumers got their final but massive fiscal stimulus handout. 

Inflation then accelerated and sales have struggled to keep up with inflation. In real terms sales fell from 233,724 to 230,852 from April to May. 

That's a month-over-month decline of 1.2 percent, using the CPI as a deflator. It's real, not nominal spending that's an input to GDP.

A Second Look at Credit Card Spending, What is It "Really"?

Also consider the Fed's latest consumer credit report. It's for April, not May, and shows a similar setup. 

For discussion, please see A Second Look at Credit Card Spending, What is It "Really"?

This post originated at MishTalk.Com.

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