Thursday, June 12, 2008

Real Retail Sales

by Bill McBride on 6/12/2008 10:11:00 AM

Retail sales in April (ex-auto) were strong. From the WSJ: Stimulus Checks Bolster Retail Sales

Retail sales increased by 1.0%, the Commerce Department said Thursday. ... Sales in the previous two months were revised strongly upward. Sales in April increased 0.4%; originally, Commerce said April sales dropped 0.2%. March sales increased 0.5%; earlier, Commerce said March sales rose 0.2%.

The healthy increase in May sales suggested consumers were putting to work some money the government kicked back to them in a plan to stimulate the foundering economy. ... $48 billion in payments were cut in May, Treasury Department numbers indicate.
U.S. retail and food services sales for May were $385.4 billion, up from $381.6 billion in April. That is an increase of $3.8 billion - a small amount compared to the $48 billion in stimulus checks.

This graph shows the year-over-year change in nominal and real retail sales since 1993.

Year-over-year change in Retail Sales Click on graph for larger image in new window.

To calculate the real change, the monthly PCE price index from the BEA was used (May PCE prices were estimated based on the increases for the last 3 months).

Although the Census Bureau reported that nominal retail sales increased 2.1% year-over-year (retail and food services increased 2.5%), real retail sales declined 0.8% (on a YoY basis).

So despite the strong sales in May, the YoY change in real retail sales is still negative.