Retail Sales Rise a Feeble 0.1 Percent, Yet Generally Better than Expected

Retail sales were better and worse than expected depending on category breakdowns.

We have another interesting set of Advance Retail Sales numbers from the Commerce Department this morning.

• Advance Estimates of U.S. Retail and Food Services Advance estimates of U.S. retail and food services sales for August 2024, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $710.8 billion, an increase of 0.1 percent (±0.5 percent) from the previous month, and up 2.1 percent (±0.5 percent) from August 2023.
• Total sales for the June 2024 through August 2024 period were up 2.3 percent (±0.5 percent) from the same period a year ago.
• The June 2024 to July 2024 percent change was revised from up 1.0 percent (±0.5 percent) to up 1.1 percent (±0.2 percent).
• Retail trade sales were up 0.1 percent (±0.5 percent) from July 2024, and up 2.0 percent (±0.5 percent) from last year.
• Nonstore retailers were up 7.8 percent (±1.4 percent) from last year, while food services and drinking places were up 2.7 percent (±2.1 percent) from August 2023.

Real vs Nominal Sales

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

It’s real sales that add to GDP and this blog is among the few places that discusses real sales. There might be others but I have not seen them.

This year we have four months of positive and four months of negative retail sales.

Nominal Advance Retail Sales Percent Change Month-Over-Month

These numbers gyrate so much it’s hard to have much faith in any of them.

Did consumers really go on a grocery shopping spree last month then reduce grocery expenses this month?

And the swings in motor vehicles are ridiculous because of the way they are counted.

Motor vehicles sales are counted when the manufacturers ship cars to the dealer, not when a consumer purchases them.

Bloomberg Econoday Consensus

• Retail Sales: -0.3 expected vs +0.1 actual
• Excluding Vehicles: +0.3 expected vs +0.1 actual
• Excluding Vehicles and Gasoline: +0.3 expected vs +0.2 actual

So is that better or weaker than expected?

Because of the way car sales are reported, one can make a case either way. Then again, not the surge of nonstore (e.g. Amazon) sales up a whopping 1.4 percent.

The next chart will help put things into proper perspective

Real vs Nominal Advance Retail Sales

Real vs Nominal Advance Retail Sales Detail

Real vs Nominal Advance Retail Sales Percent Change from Year Ago

Real retail sales are negative year-over-year in 15 of the last 18 months including the last five months.

This strong consumer idea is a total BS mirage of strong inflation.

Claudia Sahm’s Recession Denial Theory Flunks a Simple Data Test

In case you missed it, please see Claudia Sahm’s Recession Denial Theory Flunks a Simple Data Test

Fed Meets Tomorrow

Yesterday, I noted Elizabeth Warren Asks the Fed for a Three-Quarter Point Interest Rate Cut

Recession or not, I see no basis for a 50 basis point cut tomorrow. Yet as I type, that is the 60 percent expectation.