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Advance Retail Sales Month-Over-Month from Census Department, chart by Mish

Please consider the Census Department Advance Estimates of U.S. Retail and Food Services for July.

Advance estimates of U.S. retail and food services sales for July 2025, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $726.3 billion, up 0.5 percent (±0.4 percent) from the previous month, and up 3.9 percent (±0.5 percent) from July 2024. Total sales for the May 2025 through July 2025 period were up 3.9 percent (±0.4 percent) from the same period a year ago. The May 2025 to June 2025 percent change was revised from up 0.6 percent (±0.5 percent) to up 0.9 percent (±0.2 percent).

The strongest part of the report was the upward revision to June. Otherwise, the report matched the Bloomberg Econoday Consensus.

Inflation Adjustments

The key phrase above is “adjusted for seasonal variation and holiday and trading-day differences, but not for price changes.”

Real Advance Retail Sales Month-Over-Month

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Real Advance Retail Sales Month-Over-Month from Census Department, chart by Mish

Real Month-Over-Month Details

• Total: 0.3 percent
• Excluding Motor Vehicles: 0.1 percent
• Excluding Motor Vehicles and Gas: 0.0 percent
• Motor Vehicles: 1.4 percent
• Food Stores: 0.3 percent
• Nonstore (think Amazon): 0.6 percent

It’s important to look at real numbers because that is what drives GDP.

Auto-Related Distortions

Motor vehicle sales hugely propped up sales in July. But there have been wild swings nearly every month. In addition to normal volatility, tariffs have distorted the numbers all year.

The Census Department counts shipments to dealers as sales. I propose they should count actual retail sales.

Not only would the sales be more accurate, reporting would be less jumpy. Also, dealers could then not easily manipulate sales numbers to meet monthly or quarterly quotas.

Of course, what gets shipped to dealers will eventually be sold, but at what discounts or incentives?

Real vs Nominal Retail Sales Percent Change From Year Ago

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Real vs Nominal Retail Sales Year-Over-Year from Census Department, chart by Mish

Year-over-year nominal numbers look great. And that is how the average writer views things.

But year-over-year real sales are only up 1.2 percent. That’s a muddle through number.

Real vs Nominal Retail Sales Since 1992

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Real vs Nominal Retail Sales from Census Department, chart by Mish

The above chart puts real vs nominal in proper perspective.

Since 2020, nominal retail sales are up 41.0 percent. Since 2020, real retail sales are up 13.4 percent.

Inflation accounted for 27.6 percentage points (two-thirds) of the 41.0 percent rise in retail sales since 2020.

Economists and others talk about the “strong consumer”. However, the alleged strong consumer is nothing but a mirage of inflation.

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