Editor’s note: This is one of two articles posted today on GEI Analysis addressing retail sales data. This article is focused on the rate of recovery of retail sales from the Great Recession. The other article, by Doug Short, is an analysis of how current retail sales fit in a longer historical perspective.
Moderate economic growth continues to be confirmed in the March 2011 advanced retail sales numbers released today. The reasons are deeper then the headlines:
The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for March, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $389.3 billion, an increase of 0.4 percent (±0.5%)* from the previous month, and 7.1 percent (±0.7%) above March 2010. Total sales for the January through March 2011 period were up 8.1 percent (±0.5%) from the same period a year ago. The January to February 2011 percent change was revised from +1.0 percent (±0.5%) to +1.1 percent (±0.2%).
Retail trade sales were up 0.3 percent (±0.5%)* from February 2011, and 7.3 percent (±0.7%) above last year. Gasoline stations sales were up 16.7 percent (±1.7%) from March 2010 and nonstore retailers sales were up 12.4 percent (±3.1%) from last year.
Econintersect uses unadjusted data in its analysis, and understanding the dynamics of what is going on needs to go much deeper than predetermined quantitative formulas which are unable to handle distortions in the historical data.
- Over the last 4 months – the YoY increase has been in a tight range of a little over 7% YoY gain. The exception was last month where the increase was 9%.
- March 2011 sales are historically high for March.
- The YoY increase in March 2011 is $36 billion. The YoY increase in fuel purchases is $6 billion. No question fuel is taking a larger percentage of retail sales – fuel is 10% of retail sales but 17% of the YoY increase.
- The biggest increase in retail sales came from motor vehicles – Up $7 billion YoY.
- Easter in 2010 was on April 4th putting significant Easter sales in March. This year, with Easter on April 24th – most Easter sales will be in April.
- How much of this retail sales increase is inflation? Likely much more than half.
Even being pessimistic, it is impossible to make this data look bad based on trends over the past several months. The only argument is how strong the data trend really is. Econintersect believes the seasonally adjusted data in the headlines is a fair assessment of the March 2011 retail sales.
March Retail Sales: A Slight Decline in Real Terms by Doug Short
Retail Sales and Credit Expansion Reports not Real by Rick Davis
Retail Sales Do Not Point to Real Economic Growth by Steven Hansen
Wholesale Sales: Evidence of Moderate Growth by Steven Hansen