Advance Retail Sales from the Commerce Department, chart and calculation by Mish

Advance Retail Sales Details

• Advance estimates of U.S. retail and food services sales for August 2023, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $697.6 billion, up 0.6 percent (±0.5 percent) from the previous month, and up 2.5 percent (±0.7 percent) above August 2022.
• Total sales for the June 2023 through August 2023 period were up 2.2 percent (±0.4 percent) from the same period a year ago.
• The June 2023 to July 2023 percent change was revised from up 0.7 percent (±0.5 percent) to up 0.5 percent (±0.2 percent).
• Retail trade sales were up 0.6 percent (±0.5 percent) from July 2023, and up 1.6 percent (±0.5 percent) above last year.
• Gasoline stations were down 10.3 percent (±1.1 percent) from last year, while food services and drinking places were up 8.5 percent (±2.3 percent) from August 2022.

The key words are “adjusted for seasonal variation and holiday and trading-day differences.” I calculate inflation-adjusted sales because that is what feeds GDP.

Retail sales were up 0.56 percent, rounded to 0.6 percent by the commerce department and me. I calculate real sales at -0.07 percent, rounded to -0.1 percent.

Nominal Advance Retail Sales Percent Change Month-Over-Month

Advance Retail Sales from the Commerce Department, chart and calculation by Mish

Nominal Retail Sales Month-Over-Month

• Total: +0.6 Percent
• Motor Vehicles: +0.3 percent
• Excluding Motor Vehicles and Parts: +0.6 Percent
• Excluding Motor Vehicles and Gas: +0.2 Percent
• Food Stores: +0.4 Percent
• Nonstore (think Amazon): +0.0 Percent

January Spending Spikes

There have been huge pikes in January for several years and dips in December or February.

I believe this is due to a change in consumer preference with an increasing propensity to give gift cards for Christmas which do not count as sales until spent in January.

This can lead to wild seasonally-adjusted swings in December, January, and February. For example Nov, Dec, Jan, Feb (2022-2023) percentages were Nov -1.3%, Dec -0.7%, Jan 2.8%, Feb -0.7%, and Mar -0.9%.

The last three yearly totals are 2021 +3.5%, 2022 +1.4%, 2023 +2.8%.

Real vs Nominal Advance Retail Sales Since 1992

Advance Retail Sales from the Commerce Department, chart and calculation by Mish

The impact of inflation on retail sales is striking. Inflation is due to three rounds of fiscal stimulus (the last one under Biden totally unwarranted), a hyperactive Fed that kept interest rates too low, too long, and now Bidenomics.

Real vs Nominal Advance Retail Sales Detail

Advance Retail Sales from the Commerce Department, chart and calculation by Mish

Inflationary Mirage

Talk of a “strong consumer” is entirely an inflationary mirage.

Real retail sales peaked in April of 2022. They are even below the numbers posted in April of 2021 (yellow highlights).

Real vs Nominal Retail Sales Percent Change From Year Ago

Advance Retail Sales from the Commerce Department, chart and calculation by Mish

Year-over-year real retail sales are negative for nine of the last ten months.

Workers Hammered by Inflation Again as Real Earnings Sink 0.4 to 0.6 Percent

For more on the latest CPI numbers, please see Workers Hammered by Inflation Again as Real Earnings Sink 0.4 to 0.6 Percent

Also, note Real Median Household Income Is Another Measure That Smacks of Recession.

Meanwhile, talk of “strong consumers” is nothing more than “strong inflation”. There is no other realistic interpretation from these charts.

More By This Author:

Real Median Household Income Is Another Measure That Smacks Of Recession
Workers Hammered By Inflation Again As Real Earnings Sink 0.4 To 0.6 Percent
Consumer Price Inflation Jumps 0.6 Percent Led By Energy And Shelter