Retail sales month-over-month, data from Census Department, chart by Mish

The Advance Retail Sales report for May shows the expected flattening of consumer spending following the upwardly revised March surge of 1.7 percent from the initial reported 1.4 percent.

Advance estimates of U.S. retail and food services sales for May 2025, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $715.4 billion, down 0.9 percent from the previous month, and up 3.3 percent from May 2024.

The March 2025 to April 2025 percent change was revised from up 0.1 percent to down 0.1 percent . Retail trade sales were down 0.9 percent from April 2025, and up 3.0 percent (±0.5 percent) from last year.

Nonstore retailers were up 8.3 percent from last year, while food service and drinking places were up 5.3 percent from May 2024.

The key phrase is in italics. These are nominal sales. It’s real (inflation-adjusted) sales that feed GDP.

Month-Over-Month Percent Changes

• Total: -0.9
• Excluding Motor Vehicles -0.3
• Excluding Motor Vehicles and Gas: -0.1
• Motor Vehicles: -3.5
• Food Service: -0.9
• Gas Stations: -2.0
• Nonstore: 0.9
• Food Stores: -.07
• General Merchandise 0.1

The gyrations in motor vehicles are so wide they distort the chart. For two months the Fred download does not show Department Stores. I sense an error and will contact Fred.

Consensus Estimates

The Bloomberg Econoday consensus was -0.6 percent vs -0.9 percent reported.

Since the Commerce Department revised April lower by 0.2 percentage points the consensus miss was effectively 0.5 percentage points too optimistic.

Advance Retail Sales Millions of Dollars Seasonally Adjusted

Retail sales have soared, in nominal terms. Real inflation adjusted sales are another matter.

Real vs Nominal Advance Retail Sales

Real vs Nominal Advance Retail Sales Detail

Real vs Nominal Advance Retail Sales Change

• Since February 2020, retail sales are up 38.9 percent
• Since January 2020, real retail sales are up 12.3 percent
• Since last year, real sales are up 0.9 percent while nominal sales are up 3.3 percent.

Since the pandemic free money spikes, real sales are down.

The allegedly strong consumer is a mirage of inflation.

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