Retail sales look strong in April but it’s all a mirage of inflation.
Retail sales look strong in April but it’s a mirage of inflation.
Please consider the Census Department report on Advance Retail Sales for April of 2026.
Advance estimates of U.S. retail and food services sales for April 2026, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $757.1 billion, up 0.5 percent (±0.4 percent) from the previous month, and up 4.9 percent (±0.5 percent) from April 2025.
Total sales for the February 2026 through April 2026 period were up 4.4 percent (±0.4 percent) from the same period a year ago. The February 2026 to March 2026 percent change was revised from up 1.7 percent (±0.4 percent) to up 1.6 percent (±0.2 percent).
Retail trade sales were up 0.5 percent (±0.4 percent) from March 2026, and up 5.2 percent (±0.5 percent) from last year. Nonstore retailers were up 11.1 percent (±1.8 percent) from last year, while food services and drinking places were up 2.7 percent (±1.8 percent) from April 2025.
The key phrase above is “adjusted for seasonal variation and holiday and trading-day differences, but not for price changes.”
The report only lists nominal sales, not real (inflation-adjusted sales). It’s real sales that feed GDP.
Nominal Retail Sales Month-Over Month Change
- Total: 0.5 percent
- Excluding Motor Vehicles: 0.7 percent
- Excluding Motor Vehicles and Gas: 0.5 percent
- Motor Vehicles: -0.4 percent
- Food Stores: 0.7 percent
- Nonstore Sales: 1.1 percent
- Gas Stations: 2.8 percent
Those look strong, but real sales are down.
Real Advance Retail Sales Month-Over-Month
Real Advance Retail Sales Percent Change Month-Over-Month
- Total: -0.1 percent
- Excluding Motor Vehicles: -0.1 percent
- Excluding Motor Vehicles and Gas: -0.2 percent
- Motor Vehicles: -1.1 percent
- Food Stores: 0.2 percent
- Nonstore Sales: 0.5 percent
- Gas Stations: 2.1 percent
Real vs Nominal Advance Retail Sales
Real vs Nominal Retail Sales Detail
Real vs Nominal Sales Notes
- Real retail sales peaked in March of 2021 at 233,440. They are now 227,758. That’s a decline of 5,682 or 2.4 percent.
- In March of 2021, nominal sales were 603,581. They are now 757,085. That’s an increase of 153,504 or 25.4 percent.
Over 100 percent of the increase in retail sales since March of 2021 is due to inflation.
Yet, I can guarantee there will be numerous comments from mainstream economic illiterates today about the “strong consumer”.
Oh, and didn’t someone campaign on fixing this?
Real vs Nominal Advance Retail Sales Percent Change from Year Ago
Percent Change from Year Ago
- Nominal retail sales year-over year peaked in March of 2025 at 5.2 percent, now 4.9 percent. That’s the number the Commerce Department reports.
- Real retail sales year-over year peaked in March of 2025 at 2.7 percent, now 1.1 percent. That’s the number that matters.
But hey, “Look at the Dow. That’s what everyone should be talking about,” said Attorney General Pam Bondi right before she was fired.
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I do not think the retail sales report reflecting positive until inflation was factored in is going to be an outlier going forward. Inflation has screwed over this country as much or more than anything else that has been thrust upon the citizens and future economic reports are going to reflect this more. Removing the gold standard by Nixon to keep our dollars from being converted to gold allowed deficit spending with the consequences deferred, but it’s now harder to export. The fed taking upon itself to redefine stable prices as 2% inflation falsely legitimized inflation and only helped defined the rate at which we moved to this point and even their definition wasn’t fast enough since greater than 2% inflation has been the norm for a long while. Thinking we can inflate our way to fiscal sanity is looking back at the last 55 years of fiscal and monetary policy and coming to the wrong conclusion, more of the same does not get different results someone famous once said.
It is just so remarkable and intriguing to have real retail sales DOWN 2.4% since March 2021… yet S&P profits and valuations hugely higher over the same period.
Companies have been ruthless in eliminating low profit margin items. Witness the death of the car for higher profit margin SUVs. Even there base models are being eliminated for the same reason.
They are equally ruthless in automating to save labor whenever possible,
Umm is that not merely Capitalism at the most efficient practice?
It’s crony capitalism, or socialism for the wealthy, when you print money to give to people to buy expensive vehicles, to try and hold up inflated US automaker stock prices. We don’t have free market capitalism.
Witness the death of the US auto industry. They already had to be bailed out back in the gfc, which actually wasnt a crisis, and now they are surviving on 2 trillion of deficit spending, but that cant last. If they dont start making affordable modest cars again, theyll eventually go under.
Share buybacks, how do they work?
There’s only one thing that will fix this: rate cuts. /s
Legalize all drugs, prostitution and gambling. Then tax them. For the drugs use the Wires Hamsterdam method combined with a New Jack City type enclosure. I would toss drunks in there too.
Use some of the money for additional therapy and medical facilities for anyone willing to get clean. Place a three strikes rule in effect, backslide three times and no more rehab time or medical treatment.
Why piss away money to private prisons or allow criminals to walk the streets after a show court trial?
It’s fine. They can just put the difference on their credit cards.
They spent more but bought less. Got it.
“Over 100 percent of the increase in retail sales since March of 2021 is due to inflation.”
So, all people combined, are buying fewer real goods than they did five years ago? Sorry, Mish, but that is not correct. Real GDP has increased since 2021, and retail goods have increased less in price than other items like healthcare and OER/rent
What does this have to do with the amount of retail goods purchased? It props up demand a bit, at best.
It has to do with the fact that Mish consistently uses CPI to adjust these nominal retail numbers down when the CPI reflects way more than just retail sales (and so is statistically incorrect to use for this data series)
(note his many posts about why CPI is so high; those posts do not focus on how much retail items are increasing in price – for a good reason).
Real (inflation-adjusted) GDP includes other production besides just retail sales, but it has been at 2.5% growth (or higher) since 2021: https://fred.stlouisfed.org/series/GDPC1#. Real retail sales are not flat since 2021
Agree. One thing nobody notices is that hourly wages are up 33% from Jan 2020. From $28.5 to $37.4. You cannot have 2% inflation when wages are rising at 2.8% a year.
Depends on how those wages are distributed among the population.
I think the best part of this data will be hearing both major political parties say that “no one saw this coming”. It’ll certainly be what the Fed says as they try to polish this impossible turd in a month or two.
When people look back on this presidency in the years ahead, I think the people of the future will be dumbfounded by just how much lying went on to the American people this decade. Everything is fine, the economy is great, industries are growing! It’s on par with German propaganda at the end of WW2 in terms of sheer delusion and it is terrifying to behold.
Trump was elected as a collective cry to burn it down after the rocky pandemic, and he’s done exactly what he promised voters he would do. If anyone here still believes in America as a nation continuing to exist as it is past the next twenty years, I would love to hear why you think that. To me, all signs point to the end of an empire.
Its not clear how much the people of the future will be able to distinguish the truth from white lies to outright lies.
Both parties desperately want to control the MSM (main stream media) so they can control the narrative. It’s not just here either, every country is trying to do this in order to consolidate power and make themselves look great while vilifying anyone not in agreement. And if you are not in agreement with the party in power (in whatever country you reside) you are increasingly spied on and labeled a dangerous person to the ‘State’.
Then add in all the AI hallucinations and deliberate disinformation posted everywhere and it’s going to get harder than ever to get to the truth, whatever it might be in whatever subject it might be.
I’m personally keeping physical copies of books (encyclopedias and other factual books) for reference sake.
Narrative control is key. If they don’t get control of it, somebody else will, and use it for their ends. People believe whatever comes on their screens. The internet made this a much bigger problem.
But how do you know those books aren’t biased? Wasn’t that the MAGA complaint, too much woke/critical race theory/LGBTQ in academia?
I also own a vast physical library. Everything is biased through any cultural lens and personal preferences.
The simple answer is if something exists in a single mind, no matter how insane that mind seems, then it exists in the world.
It is our own bias and reality filter we need to define.
I believe that ALL information should be open for access. At the same time I fear all information open for access.
There is no win nor loss.
I could quote supporting arguments for either side of the information debate. In the end it will always be personal preference.
Some Rick and Morty wisdom
“Nobody exists on purpose. Nobody belongs anywhere. We’re all going to die. Come watch TV.”
“There’s no meaning, Morty. There’s just data.”
Therapist: Why didn’t you want to come here?
Rick: Because I don’t respect Therapy. Because I’m a Scientist. Because I invent, transform, create and destroy for a living and when I don’t like something about the World I change it. And I don’t think going to some rented office in a strip mall to listen to an Agent of Averageness explain which words mean which feelings has ever helped anyone do anything. I expect it’s helped a lot of people get comfortable and stop panicking, which is a state of mind we value in the animals we eat but not something I want for myself. I’m not a cow! I’m a Pickle! When I feel like it. So, you asked…
Dude everyone lies all the time.
What you actually mean is called a WILDERNESS OF MIRRORS.
Anyone with any sense needs to be preparing to leave the US in the near future. At the very least get a second passport. The Chief Pedophile of the United States and his flunkies are gerrymandering all the states that they can into single party states. Your vote will soon be meaningless. Eventually you will not be able to leave the country so get while the getting is good.
‘Your vote will soon be meaningless.”
Your vote has always been about giving the rich and powerful the agency to act in their best interest not yours.
That’s the whole point.
“I think the people of the future will be dumbfounded by just how much lying went on to the American people this decade”.
Wow that is a very limited timeline. Pretty much the history of the world is based on lying to the genpop about everything.