Retail sales were better and worse than expected depending on category breakdowns.
We have another interesting set of Advance Retail Sales numbers from the Commerce Department this morning.
- Advance Estimates of U.S. Retail and Food Services Advance estimates of U.S. retail and food services sales for August 2024, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $710.8 billion, an increase of 0.1 percent (±0.5 percent) from the previous month, and up 2.1 percent (±0.5 percent) from August 2023.
- Total sales for the June 2024 through August 2024 period were up 2.3 percent (±0.5 percent) from the same period a year ago.
- The June 2024 to July 2024 percent change was revised from up 1.0 percent (±0.5 percent) to up 1.1 percent (±0.2 percent).
- Retail trade sales were up 0.1 percent (±0.5 percent) from July 2024, and up 2.0 percent (±0.5 percent) from last year.
- Nonstore retailers were up 7.8 percent (±1.4 percent) from last year, while food services and drinking places were up 2.7 percent (±2.1 percent) from August 2023.
Real vs Nominal Sales
The key phrase from the Census Department is “adjusted for seasonal variation and holiday and trading-day differences, but not for price changes.”
It’s real sales that add to GDP and this blog is among the few places that discusses real sales. There might be others but I have not seen them.
This year we have four months of positive and four months of negative retail sales.
Nominal Advance Retail Sales Percent Change Month-Over-Month
These numbers gyrate so much it’s hard to have much faith in any of them.
Did consumers really go on a grocery shopping spree last month then reduce grocery expenses this month?
And the swings in motor vehicles are ridiculous because of the way they are counted.
Motor vehicles sales are counted when the manufacturers ship cars to the dealer, not when a consumer purchases them.
Bloomberg Econoday Consensus
- Retail Sales: -0.3 expected vs +0.1 actual
- Excluding Vehicles: +0.3 expected vs +0.1 actual
- Excluding Vehicles and Gasoline: +0.3 expected vs +0.2 actual
So is that better or weaker than expected?
Because of the way car sales are reported, one can make a case either way. Then again, not the surge of nonstore (e.g. Amazon) sales up a whopping 1.4 percent.
The next chart will help put things into proper perspective
Real vs Nominal Advance Retail Sales
Real vs Nominal Advance Retail Sales Detail
Real vs Nominal Advance Retail Sales Percent Change from Year Ago
Real retail sales are negative year-over-year in 15 of the last 18 months including the last five months.
This strong consumer idea is a total BS mirage of strong inflation.
Claudia Sahm’s Recession Denial Theory Flunks a Simple Data Test
In case you missed it, please see Claudia Sahm’s Recession Denial Theory Flunks a Simple Data Test
Fed Meets Tomorrow
Yesterday, I noted Elizabeth Warren Asks the Fed for a Three-Quarter Point Interest Rate Cut
Recession or not, I see no basis for a 50 basis point cut tomorrow. Yet as I type, that is the 60 percent expectation.
WOW! Jeff Green????
Used electric vehicle prices continue to plummet according to a new iSeeCars study. By plummet, we mean they’ve lost 24.7 percent of their value over the past year, falling four times faster than hybrids and six times faster than gasoline models. Compare that to a 6 percent drop in used hybrid prices and 4.4 percent drop in used gasoline prices.
https://www.timesunion.com/news/article/used-electric-vehicle-prices-continue-to-plummet-19771353.php
What CPI metric is being used to deflate the last two charts?
Good question. Goods inflation has trended much lower than services recently. Deflating retail sales by overall inflation will be misleading.
Right, which is why I am asking 🙂
Hezbollah supermarkets and cell phones blew up. Syria was also infected. Galant was not fired.
Funny, I thought it was pagers that blew up.
Paging Joe Biden. Paging Kamala Harris
beepers.
Retail sales are up bc 4/6 millions immigrants work and spend, but BLS knows nothing about them.
Most of their work money goes back to the motherland .
Then they get in line for all the welfare type benefits:
Food Stamps
Section 8 Housing
It’s the new breed of poverty in America
Transfer money isn’t good enough to pay the Mexican crime families and send money to their families. They work and spend.
Real vs inflation spending continues to baffle.
Price rises push up purchase cost yet consumption remains able to find a way to spend and accommodate for it.
The falloff in Real sales is there but not so dramatic as would be expected. Considering how much rates to finance sales have risen over the same period a strong contraction continues to elude.
Look at https://www.macrotrends.net/1371/retail-sales-historical-chart
In the 2008 recession, real retail sales were flat from mid-2006 to December 2007, when real retail sales took a hit. The real drop started in May 2008, or so. The recession began in Dec 2007 (not announced until Dec 2008). The market crash was in October, 2007
Almost. the market peak was October 2007 but the actual crash only began in late 2008.
Economic results keep coming up too good to be true in my view.
I just dig the Bunker a bit deeper with each passing week.
I know there are parts of US still doing well. There always is even in worst of times.
For this to be broad based enough that there will be no injuries, have witnessed too many times what happens when it hits. No sense giving anything back to the money goblins.
Brought my new pup out for lunch yesterday. Went to a nearby smaller City, and nobody was out. I am talking nobody! We ran into maybe 1/2 dozen folks in 2 hours (albeit lunch was an hour). 2 other tables with a total of 7 in a bigger restaurant in the area at the height of lunchtime!
I understand the Holiday and all, but c’mon, even just walking around with, a dog, a child, or something? Parked in a spot, I couldn’t ever get normally before early morning, but it was Noon!
It was sort of sad to see quite frankly. Last time I saw that was decades ago, and many places closed, and some still remodeling today, as they are still playing catch up etc. it doesn’t look good from where I am at, but location is everything I suppose. I am in the heart of a very prosperous area however, so I’m a bit confused… maybe it was occurring slowly over the last few months and I missed it, as it seems to have happened all at once, from my last visit, when it was humming along just fine as usual…
Which city is this?
I wasn’t aware yesterday was a holiday? Which one did I miss?
What kind of pup?
A lot of people assume the restaurants are closed on Mons.
Remote workers often have meetings on Mon., so have to stay close to the workstation.
48 days till the election and these numbers don’t help Trump. If the fed cuts 25 it’ll boost the stock market and juice the economy, 50 may cause a minor panic and small correction.
Either way, IWM up again 1.2% today 5.3% over the last 5 days. Always a way to make money in any market. I’m prepared for either scenario to bank profits.
People aren’t voting based on the stock market. Means dick
Retail sales are up means people still have money to spend despite the “recession” we are supposedly in right now. Inflation has come down too. Gas is down. I wonder if those “Joe Biden did that” stickers are still being plastered at those gas stations.
The 25% cumulative inflation since 2021 is what matters. Less bad after you’ve lost both legs is a ridiculous argument. Shame on you
Sorry but trump is gonna lose. Take that to the bank.
Thanks. I’m not worried….And Trump losing does nothing to change the fact that Biden’s presidency has been a disaster.
good luck getting your money out though …
Are reported retail sales valid today? Post COVID Amazon saw a rise of ~40% sales in 2yrs and Walmart ~7% which reflected the closing of many small single-family retail outlets as they were forced to close. This produced the sudden rise in reported sales as this series has a stated focus on 80% retailers who report. Only very gradually has the individual retailer segment recovered. Reported retail sales declines are hard to measure if from weaker economic activity or non-reporting retailers. I no longer use this series till a clearer picture forms instead focusing on Real Personal Inc, IndPro and other measures of economic trends.
Retail sales include online sales.
Wolfstreet does a regular breakdown on this and some retailers like Walmart break it down into stores vs online and for those that do, online growth is where pretty much all growth comes from and physical stores are lucky if they remain the same.
If you’re deflating by CPI, your real retail sales changes period over period are more negative than they should be. Housing raised CPI, so you’re deducting too much inflation. Retail sales doesn’t have a housing component. Even using PCE it would be overstating the inflation component. It’s probably not great but unlikely to be quite this bad.
Thanks for this note; I think this makes sense.
Over the past six quarters (18 months), REAL GDP – adjusted for price changes – has increased each quarter according to the BEA. GDP and retail sales are not the same and retail sales are about 1/4 of GDP. But if real retail sales actually decreased over the past year and a half, then the other 3/4 of GDP must have been cranking it to make up the difference
This is an impotent economy
Strong inflation which they say is now tame enough to refuel it with lower interest rates, to save jobs. That chart shows the unabated punishing gap felt by ALL consumers vs the swings in unemployment rate felt by SOME workers. The Fed should solely be focused on inflation or at least skewed in their alleged dual mandate. Stable prices lead to general contentment across the population. I’ll address a job loss if/when it happens but I have almost no recourse to higher prices across the board. The Japanese were very happy folks with a market and economy that didn’t grow all that much but whose prices were stable. You can live live with much more certainty when prices are stable as decisions are more easily made.
Yet, they’ll lower the rates well in advance of inflation being at their target goal….but when it was below the goal they had it pegged at 0 for nearly all 8 Obama years and half of the Biden years and for the pandemic months at the tail end of Trump years.
They are an evil lot them Fedsters.
I feel the retail collapse when shopping at malls. Most stores are empty or near empty. A few mall stores stay busy with highly discounted items, especially clothing. The anchor stores are hurting badly. The crowds go to second tier stores such as Forever 21, Burlington, Marshalls and others. The discounted prices are below thrift store prices in some cases. I see so much unsold inventory. My observations are obviously anecdotal, but I sense very soft retail activity with lots of price pressures.
Its like that everywhere.
A lot of it is what Wolfstreet has deemed the ‘brick and mortar meltdown’ where by consumers have shifted their spending from brick and mortar stores (ie malls including strip malls) to online.
This trend really accelerated during the lock down and won’t be reversing itself ever. Big malls are doomed, the only question is how soon for each one. Strip malls may survive if they can get other tenants besides retail.
Strip malls survive because that’s how money is laundered. Have you ever noticed how many nail salons are in any given strip mall. Most don’t ever have customers either, yet they exist for years with no or few patrons.
I don’t doubt it regarding money laundering. Laundromats and Video Arcades (cash business) are also in those same strip malls and they too are great money laundering operations.
As far as nail salons go, probably 80% of all women frequent one on a fairly regular basis and you’d be surprised what they charge these days. But yeah, I can see off book money being put into (or out of) the till since it’s a pure service industry. Incidentally, some of those salons are also ‘fronts’ for Asian massage parlors…