Retail sales from commerce department, chart by Mish

Advance Retail Sales

Today, the Commerce Department released Advance Retail Sales Data for January.

• Advance estimates of U.S. retail and food services sales for January 2023, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $697.0 billion, up 3.0 percent (±0.5 percent) from the previous month, and up 6.4 percent (±0.7 percent) above January 2022. 
• Total sales for the November 2022 through January 2023 period were up 6.1 percent (±0.5 percent) from the same period a year ago. 
• The November 2022 to December 2022 percent change was unrevised at down 1.1 percent (±0.3 percent). 
• Retail trade sales were up 2.3 percent (±0.5 percent) from December 2022, and up 3.9 percent (±0.5 percent) above last year. 
• Food services and drinking places were up 25.2 percent (±2.6 percent) from January 2022, while general merchandise stores were up 4.5 percent (±0.2 percent) from last year.

Advance Retail Sales Month-Over-Month Other Details 

A key point to note is that retail and food services sales are adjusted for seasonal variation and holiday and trading-day differences, but not for price changes.

The nominal charts above show weakness for just a couple of months, In real (inflation adjusted) terms the sales reports look much worse.

Advance Retail Sales Real vs Nominal 

Advance Retail Sales adjusted by the CPI, chart by mish

In six of the last eight months of 2022, inflation-adjusted retail sales declined.

Real vs Nominal Advance Retail Sales in Millions of Dollars

Advance Retail Sales adjusted by the CPI, chart by mish

The above chart puts things into proper perspective. Inflation-adjusted retail sales peaked in March of 2021 on a third round of totally unwarranted fiscal stimulus. 

The 2022 peak in real sales was also in March. 

Nonetheless, this renewed strength will give the Fed more impetus for still more rate hikes and it adds to the no-recession yet debate as well.

CPI Accelerates 0.5 Percent in January, Up 6.4 Percent From a Year Ago

CPI Data from BLS, chart by Mish

The Consumer Price Index rose 0.5 percent in January and that is on top of an upward revision in December from -0.1 percent to +0.1 percent.

For a look at the CPI numbers used to calculate real sales, please see CPI Accelerates 0.5 Percent in January, Up 6.4 Percent From a Year Ago

How Long Will High Inflation Persist? What Happened to the Great Moderation?

For a longer-term outlook, please see my report How Long Will High Inflation Persist? What Happened to the Great Moderation?

More By This Author: