Retail sales jumped nearly 0.6 percent in August, but lose slightly to inflation. Year-over-year real (inflation-adjusted) sales are down nine of the last ten months.
Advance Retail Sales Details
- Advance estimates of U.S. retail and food services sales for August 2023, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $697.6 billion, up 0.6 percent (±0.5 percent) from the previous month, and up 2.5 percent (±0.7 percent) above August 2022.
- Total sales for the June 2023 through August 2023 period were up 2.2 percent (±0.4 percent) from the same period a year ago.
- The June 2023 to July 2023 percent change was revised from up 0.7 percent (±0.5 percent) to up 0.5 percent (±0.2 percent).
- Retail trade sales were up 0.6 percent (±0.5 percent) from July 2023, and up 1.6 percent (±0.5 percent) above last year.
- Gasoline stations were down 10.3 percent (±1.1 percent) from last year, while food services and drinking places were up 8.5 percent (±2.3 percent) from August 2022.
The key words are “adjusted for seasonal variation and holiday and trading-day differences.” I calculate inflation-adjusted sales because that is what feeds GDP.
Retail sales were up 0.56 percent, rounded to 0.6 percent by the commerce department and me. I calculate real sales at -0.07 percent, rounded to -0.1 percent.
Nominal Advance Retail Sales Percent Change Month-Over-Month
Nominal Retail Sales Month-Over-Month
- Total: +0.6 Percent
- Motor Vehicles: +0.3 percent
- Excluding Motor Vehicles and Parts: +0.6 Percent
- Excluding Motor Vehicles and Gas: +0.2 Percent
- Food Stores: +0.4 Percent
- Nonstore (think Amazon): +0.0 Percent
January Spending Spikes
There have been huge pikes in January for several years and dips in December or February.
I believe this is due to a change in consumer preference with an increasing propensity to give gift cards for Christmas which do not count as sales until spent in January.
This can lead to wild seasonally-adjusted swings in December, January, and February. For example Nov, Dec, Jan, Feb (2022-2023) percentages were Nov -1.3%, Dec -0.7%, Jan 2.8%, Feb -0.7%, and Mar -0.9%.
The last three yearly totals are 2021 +3.5%, 2022 +1.4%, 2023 +2.8%.
Real vs Nominal Advance Retail Sales Since 1992
The impact of inflation on retail sales is striking. Inflation is due to three rounds of fiscal stimulus (the last one under Biden totally unwarranted), a hyperactive Fed that kept interest rates too low, too long, and now Bidenomics.
Real vs Nominal Advance Retail Sales Detail
Inflationary Mirage
Talk of a “strong consumer” is entirely an inflationary mirage.
Real retail sales peaked in April of 2022. They are even below the numbers posted in April of 2021 (yellow highlights).
Real vs Nominal Retail Sales Percent Change From Year Ago
Year-over-year real retail sales are negative for nine of the last ten months.
Workers Hammered by Inflation Again as Real Earnings Sink 0.4 to 0.6 Percent
For more on the latest CPI numbers, please see Workers Hammered by Inflation Again as Real Earnings Sink 0.4 to 0.6 Percent
Also note Real Median Household Income Is Another Measure That Smacks of Recession.
Meanwhile, talk of “strong consumers” is nothing more than “strong inflation”. There is no other realistic interpretation from these charts.
not a whiff of deflation anywhere on planet earth. except that chinese spy balloon over carolina coast
I find this too complex to get my head around it. The US will borrow $1.5 trillion to equalize expenditures (government term since they don’t use GAAP) with revenues. Who will buy this. China is stockpiling commodities and selling treasuries (preparing for W**). So they won’t help. If the Fed buys it then they just pump more paper into the economy. It only works if the private sector buys it with savings, thus not creating paper from air. Otherwise we have chosen inflation as our future. Your opinion?
The economy is awash with liquidity. DXY just hit 105.34. And at the same time oil is rising. That’s not evidence of a slowdown.
“Inflation is due to three rounds of fiscal stimulus (the last one under Biden totally unwarranted), a hyperactive Fed that kept interest rates too low, too long, and now Bidenomics.”
Good points but it should be noted that the three rounds of fiscal stimulus were possible because the Fed was purchasing the government’s debt. The Fed has made good progress in raising interest rates but has failed badly in the much more important mission of reining in the money supply.
There is a tsunami of cash that is gushing through the markets and economy. The Fed has not implemented enough QT and the government is still spending tremendous amounts of money.
This is why the stock market has held up well in light of the interest rate increases. And it’s the reason why inflation is still ripping through the economy to such an extent that even the manipulated CPI can’t cover it all up.
On more than one occasion the Fed has made the ludicrous claim that the growth in M2 doesn’t have important implications for the economic outlook. And so the Fed is “navigating by the stars under cloudy skies” because they’ve jettisoned their most important instrument for measuring money supply.
Sales up
Stock market up
Oil up
Bitcoin up
Housing up
Bond yields up
Central bank rate up
I read an interesting comment on Wolfstreet today with something like, “if you are retired and have $1m saved that generates $55k income (Tbills at 5.5%) + 33k in social security + 22k in pension (or other savings) that generates 100k in income. If that person can get by on 60k per year then they grow 30k richer year over year.”
You can change the values however you want but the trend for people with significant savings will grow hot resulting in more spend ability and possibly more inflation. Who needs the stock market when you can get richer on US Treasuries?
dedollarisation will become an issue at one point in combination with unsustainable debt …..Tbills might be paying 20% or more in the near future ,who knows ….with 30 % inflation….or more…keep on printing printtiy baby …..Fairytales come into existence occasionallly, especially so with insane CB’s policy….won t last though….Deep State is perfectly aware ….waging war has been THE solution throughout history ….first we ll take Moscow and the we ll take Beying…. L Cohen would sing….yeah sure…especially with nukes involved this time ….
Comrade Yoda! Has been long time! Greetings from land of many potato!