Home   Logon   Mobile Site   Research and Commentary   About Us   Call 1.800.621.1675 or Email Us       Follow Us: 

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Click for Bio
Follow Brian on Twitter Follow Brian on LinkedIn View Videos on YouTube
   Bob Stein
Deputy Chief Economist
Click for Bio
Follow Bob on Twitter Follow Bob on LinkedIn View Videos on YouTube
 
  Retail Sales Rose 0.3% in August
Posted Under: CPI • Data Watch • Employment • Government • Inflation • Retail Sales • Spending • COVID-19
Supporting Image for Blog Post

 

Implications:  Retail sales rose 0.3% in August, but the underlying details were not as solid as the overall headline number suggests. Prior months’ numbers were revised lower and including revisions retail sales rose a smaller 0.1%. Eight of thirteen retail categories grew in August, led by gains in autos and restaurants & bars, rising 2.8% and 1.1% respectively for the month.  The largest declines were for gas stations, which fell by 4.2% reflecting much lower prices at the pump, and non-store retailers, with fell 0.7% in August.   “Core” sales, which exclude the most volatile categories of autos, building materials, and gas stations, rose 0.2% in August, but were revised lower for prior months. Still these sales remain up 7.4% from a year ago.  The problem is that one of the key drivers of overall spending is inflation.  Yes, consumers are spending more, but they are not taking home the same amount of goods.  Although retail sales are up 9.1% from a year ago, that pace barely outpaces inflation, with the CPI up 8.3% over the same period.  Due to very loose monetary policy and the massive increase in government transfer payments in response to COVID, retail sales are still running much hotter than they would have had COVID never happened.  However, loose monetary policy, which helped finance that big increase in government spending, is translating into high inflation, which is why “real” (inflation-adjusted) retail sales are up much less versus a year ago.  This doesn’t mean overall consumer spending is down; “real” (inflation-adjusted) spending on services is also still rising.  But it does mean overall real consumer spending growth is soft.  What to expect in the months ahead?  Retail sales will struggle to keep pace with inflation while overall consumer spending increases modestly due to the service sector, as consumers continue to shift their preferences back to services.  In other news this morning, import prices fell 1.0% in August while export prices dropped 1.6%.  In the past year, import prices are up 7.8%, while export prices are up 10.8%.  On the employment front, initial claims for unemployment insurance declined 5,000 last week to 213,000.  Continuing claims rose 2,000 to 1.403 million.  These figures are consistent with continued healthy job growth in September.

Click here for a PDF version

Posted on Thursday, September 15, 2022 @ 11:23 AM • Post Link Share: 
Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2022 All rights reserved.