John Sturges (Davidson) submits:

Many worry Retail Sales being flat since March 2021 is a outright sign of general economic weakness. My interpretation is that it is more a signal of the 20% unreported Retail Sales are rebuilding after being devastated by the COVID shutdowns. The series Real Retail and Food Service Sales only captures the largest retailers or 80% of sales. The rest of these sales goes uncounted and are handled by the many smaller retailers who do not meet reporting benchmarks. It was group that lost sales to larger retailers when they were forced to shut down during COVID. This is the reason behind the sudden 15% growth above the reported trend as these sales shifted to the larger store reporting category. That over all sales have been flat and now nearing the retail sales trend prior to the lockdowns can be interpreted as a rebuilding of these smaller non-reporting businesses.

One can see that Real Personal Income, even though impacted by COVID related disbursements, has continued on-trend and is one of the indicators I use (along with others) to forecast recession potential. There is no recession potential at the moment, and I do not expect to see such for 3-4 years

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