Real retail sales are flat trending

Retail sales and food-service spending rose 0.5 percent in March after a 0.8 percent gain in February (see first chart). However, today’s retail sales data are not adjusted for price changes. In real terms, total retail sales fell 0.7 percent (adjusted using CPI). Still, total retail sales rose 6.9 percent from a year earlier, while actual retail sales fell 1.5 percent.

Key retail sales, excluding motor vehicle dealers and petrol retailers, rose 0.2 percent in the month after declining 0.1 percent in February (see first chart). The fall leaves that measure with a 6.2 percent gain compared to a year ago. After adjusting for price changes, real core retail sales fell 0.2 percent in March and 0.3 percent from a year earlier (see Chart 2).

The divisions for the month were mostly higher with ten up and three down in March. Gasoline costs rose 8.9 percent. However, the average price of a gallon of gasoline was $ 4.40, up 19.8 percent from $ 3.68 in February. Sales of general merchandise followed 5.4 percent growth, while sales of electronics and appliance stores and sports goods, hobby and bookstores grew 3.3 percent each month.

Non-store retailers led the decline at 6.4 percent, followed by motor vehicle sales at 1.9 percent and health and personal care store sales at 0.3 percent (see Chart 3).

Overall, the total nominal retail sales have increased this month, especially due to the increase in petrol prices. In real terms, however, total and core retail sales declined. In addition, the actual total and actual original retail sales remained essentially unchanged from a year earlier.

With persistent labor shortages, material shortages, and logistical problems, production recovery across the economy as a whole can slow down and maintain upward pressure on prices. In addition, the geopolitical and global economic instability caused by Russia’s aggression in Ukraine has had a dramatic effect on capital and commodity markets, triggering a new wave of business disruption while a new Fed tightening cycle will affect future economic activity. The outlook has become extremely uncertain.

Robert Hughes

Bob Hughes

Robert Hughes joined AIER in 2013 for over 25 years researching economic and financial markets on Wall Street. Bob previously headed Brown Brothers Harriman’s Global Equity Strategy, where he developed an equity investment strategy that combines top-down macro analysis with bottom-up fundamentals.

Prior to BBH, Bob was a senior equity strategist at State Street Global Markets, a senior economic strategist at Prudential Equity Group, and a senior economist at Citicorp Investment Services and a financial markets analyst. Bob holds an MA in Economics from Fordham University and a BS in Business from Lehigh University.

Receive notifications of new articles from Robert Hughes and AIER.

Leave a Reply

Your email address will not be published.