Excluding autos and gasoline, real inflation-adjusted sales were flat. 
Please consider the Census Department Advance Estimates of U.S. Retail and Food Services for July.
Advance estimates of U.S. retail and food services sales for July 2025, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $726.3 billion, up 0.5 percent (±0.4 percent) from the previous month, and up 3.9 percent (±0.5 percent) from July 2024. Total sales for the May 2025 through July 2025 period were up 3.9 percent (±0.4 percent) from the same period a year ago. The May 2025 to June 2025 percent change was revised from up 0.6 percent (±0.5 percent) to up 0.9 percent (±0.2 percent).
The strongest part of the report was the upward revision to June. Otherwise, the report matched the Bloomberg Econoday Consensus.
Inflation Adjustments
The key phrase above is “adjusted for seasonal variation and holiday and trading-day differences, but not for price changes.”
Real Advance Retail Sales Month-Over-Month
Real Month-Over-Month Details
- Total: 0.3 percent
- Excluding Motor Vehicles: 0.1 percent
- Excluding Motor Vehicles and Gas: 0.0 percent
- Motor Vehicles: 1.4 percent
- Food Stores: 0.3 percent
- Nonstore (think Amazon): 0.6 percent
It’s important to look at real numbers because that is what drives GDP.
Auto-Related Distortions
Motor vehicle sales hugely propped up sales in July. But there have been wild swings nearly every month. In addition to normal volatility, tariffs have distorted the numbers all year.
The Census Department counts shipments to dealers as sales. I propose they should count actual retail sales.
Not only would the sales be more accurate, reporting would be less jumpy. Also, dealers could then not easily manipulate sales numbers to meet monthly or quarterly quotas.
Of course, what gets shipped to dealers will eventually be sold, but at what discounts or incentives?
Real vs Nominal Retail Sales Percent Change From Year Ago
Year-over-year nominal numbers look great. And that is how the average writer views things.
But year-over-year real sales are only up 1.2 percent. That’s a muddle through number.
Real vs Nominal Retail Sales Since 1992
The above chart puts real vs nominal in proper perspective.
Since 2020, nominal retail sales are up 41.0 percent. Since 2020, real retail sales are up 13.4 percent.
Inflation accounted for 27.6 percentage points (two-thirds) of the 41.0 percent rise in retail sales since 2020.
Economists and others talk about the “strong consumer”. However, the alleged strong consumer is nothing but a mirage of inflation.
Related Posts
August 14, 2025: Producer Prices for July Unexpectedly Rise the Most Since March 2022
Producer prices were high across the board in July.
August 14, 2025: US Debt Now Grows by $1 Trillion Every 150 Days
US national debt just topped $37 trillion and is growing fast.
August 15, 2025: Producer Prices at Intermediate Stages Suggest Big Inflation on Deck
Intermediate prices will eventually impact consumer prices.
DIA made a new all time high, above July 23 high, but close below. UPS, after peaking in Feb 2022, tested March 2020 low. Something is wrong !
Amazon is disrupting UPS and probably FedEx too. Can’t include Amazon in Dow Transportation index, too diversified. This probably renders Dow Theory moot. Monitor upstream rather than last-mile shippers instead?
The rate-of-change in short-term monetary flows, money times velocity of circulation, the proxy for R-gDp is still positive. And the FED is loose. Interest rate manipulation is nonsense. Interest is the price of loan funds. The price of money is the reciprocal of the price level. Even Volcker got this wrong.
Volcker: “Put simply, we would control the quantity of money (the money supply) rather than the price of money (interest rates).”
Kamala is smiling with Putin. She can’t stop laughing. Timmy kicked the media
out, let’s go, let’s go, before Kamala will sleep her way to power, with Putin, for a ceasefire.
Kamala, surrounded by F-22, met Putin.
With a B-2 flyover as well to add to the friendly touch.
Kamala will never do it !
How can anybody afford a new vehicle these days? More importantly, why would anybody buy a new vehicle these days?
I’d buy a “new” ‘95 Intrepid or ‘09 Taurus if I could. No need for infotainment nonsense.
Bought one 2 months ago. We’d saved up cash for it for 10 years. Prices were down a bit, though still up from pre-COVID. New vehicles have clean history and warranty, no doubts about BS told by lying prior owner(s).
P.S. Unless people buy new vehicles, the supply of used vehicles also dries up!
The Census Department also needs to modernize their data reporting. Their antiquated system fails in 3 ways:
(1) it doesn’t adequately distinguish between shopping experiences (in-store vs online ordering etc.)
(2) it doesn’t adequately sort out the types of merchandise that are selling in any particular type of shopping experience, and
(3) it doesn’t track physical or unit sales volume, only sales revenue. Unit sales data is easy to track nowadays and would be invaluable for understanding the health of the economy, more-accurate inflation metrics, and many other purposes.
30 years ago it made sense to keep all the physical store categories and tack on a “Nonstore” (Amazon) category for mail-order or online ordering. Nowadays that’s just ludicrous. You can order almost anything online and many of the online orders are assigned to “store” rather than “nonstore” businesses (like Walmart). And all sales should be broken out by type of product purchased, rather than (or in addition to) by “type of store”.
For example, Mish always tries to go from “nominal” to “real” (inflation-adjusted) retail sales using the consumer price index (CPI). But the CPI includes things like rent, insurance and healthcare, none of which matter for retail sales. “CPI-adjusted-retail sales” is less wrong than “nominal” sales, but isn’t correctly inflation-adjusted.
If we had proper reporting of unit retail sales, Mish could report both changes in unit volume, changes in inflation, and changes in sales volume, all of which matter to different groups…
Of course, that sounds like it would be more useful. But examples show why that would be practicably impossible and not very useful.
Lots of individual stores and separate retail outlets (physical and online) sell bicycles (or golf clubs, miter saws, etc.). Which government or private statistical agency has good and immediate access to how many retail units of bicycles were sold last month? And for what price? My kid’s knock-off for $100 or my neighbor’s $10,000 road bike?
Premium-brand or generic coffee? In 10oz or 1-lb bags? This is true for unit retail sales of almost every good we buy.
That’s why it is estimated imperfectly by dollar amount of total monthly retail sales – in broad categories. Some immediate information is better than no information – as long as you know its limitations in accuracy.
99+% of of retail sales are done through computerized cash registers using SKU barcodes linked to product inventory and pricing databases.
Companies know exactly what they’re selling, and for how much, and how much prices of each specific item have changed since last month and last year.
Thus, Amazon and Walmart and many other companies have vastly better retail-goods inflation data than the Federal Government’s 1950s style system. Some of them are now implementing real-time price changes (“like for airplane or concert tickets, but for everything you buy”), and even customer-specific pricing (which ought to be illegal).
So companies know what they sold (and lost to theft…) in order to manage inventory. Also, they already report a subset of that data – their sales tax revenues. Since the data already exists, and the reporting pipeline already exists, it ought to be possible to gradually enlarge the data that is reported.
Many businesses already do this sort of thing voluntarily, summarizing and publishing the unit sales data for major goods. This includes automobiles, mobile phones, computers and many other products.
After scaleup, the cost would be minimal to do this for all products sold via cash registers.
Anything is possible if we devote enough time, money and humans to do it. But to what use?
With your explanation, you would have to ask or legally require Walmart and Amazon to disclose how many retail SKU units of every single item they sell every month to the government statisticians. But that still does not include every meal sold at every restaurant (large and small) which is included in retail sales. Or every single item sold in all the grocery stores across America every month (which is also included). Or every Slim Jim sold with every gas fill-up. And so on.
And what about prices? Each retailer would sell at different prices, especially across the country. So do you just care about SKU units sold or what consumers actually pay for those items?
What you’re proposing is theoretically possible, but at a massive cost for data collection. At a macro level, I think most market participants just want a general idea of whether retail sales are going up or down, and at what general rate. That can proxy for where GDP and employment (the actual important items) are probably headed in the near future.
The BEA inflation adjusts retail sales. So you are mostly mistaken.
It uses a PCE or GDP deflator all of which are close to the deflator I used.
Please point me to the data series you are talking about?
I cannot find it on the BEA list of upcoming data reports. “BEA Real Retail Sales” doesn’t show up on FRED. Google’s AI search assistant claims there’s something but does not provide a source link, so it could be hallucinating.
I’m not saying it doesn’t exist, just that it’s not easy to find.
P.S. It’d still be wrong if it’s not deflating sales of goods by prices of said goods. PCE has a lot of non-retail in it too.
In Apr 2015 DXY was $100. In Aug 2025 DXY is testing Apr 2015 hi from below. Real houses and retail sale are either in accumulation or distribution. Real retail sales might drop below 2020 low if DXY will rise. Higher DXY, lower housing, healthcare, commodities, cars…along with AI. The end of the dollar: bs !
It’s really hard to wrap your head around y-o-y real retail sales increase of 1.2% and the 16.4% increase in the S&P 500 y-o-y… if profitability is really supposed to be an important determinant of stock prices.
A handful of 800 lb gorilla stocks (NVidia, Apple, Meta, TSLA etc) overweight the S&P 500. If those go up and everything else goes down the S&P 500 will still go up.
Also retail sales encompasses more than just S&P companies. So it’s possible S&P companies sales are up more than 1.2% while non-S&P companies (mom and pop businesses, NYSE companies etc) are flat or down.
The historical P/E ratio is always interesting to look at (look at how over valued it was during the financial crisis in 2008/2009)
https://www.macrotrends.net/2577/sp-500-pe-ratio-price-to-earnings-chart
Profitability helps determine how investment cash is allocated. People have a lot of money, and stocks are still some of the best places to invest. It doesn’t matter if the PE of a stock is high. Just that it is better than alternatives.
Going forward, investors should monitor auto sales and other discretionary categories such as restaurant spending to gauge consumer health. Recession risks remain low, but I think it’s wise for the Fed to shift to a more neutral stance and cut rates in coming meetings,” said Jeffrey Roach, chief economist for LPL Financial.
https://qz.com/july-us-retail-sales-grew-led-by-autos
Why not cut rates to zero? Blow the whole thing sky high.
Right, just because refinancing the debt would be nearly free, doesn’t make it a smart idea.