Flat Retail Sales in September: A Decline in Real Terms

By at 14 October, 2022, 2:34 pm

by Raymond J. Keating –

The Census Bureau has reported that retail sales in September came in flat. But when one factors inflation into the mix, retail sales actually declined in real terms.

Seasonally adjusted retail and food services sales grew at 0 percent for September. And compared to a year earlier, sales were up by 8.2 percent.

However, when one considers inflation, the retail sales picture looks very different. Consumer Price Index inflation came in at 0.4 percent in September, and for the past year, it registered 8.2 percent.

That means that inflation effectively has wiped out the sales gain for the past year, and moved the September change from flat to negative.

As noted in the above graph, inflation has run ahead of the nominal gain in retail and food services sales in five of the last seven months.

Inflation is a brutal tax that leaves no one unscathed. Consumers obviously are hurt, as well as small businesses, large firms, investors, and workers. And for good measure, the Fed, which played a role in causing inflation, has no idea how to fight it other than foolishly trying to further undermine economic growth during a time of stagflation.

The resiliency of American entrepreneurs, businesses, workers and consumers are being put to a heavy test as policymakers – from costly Fed actions to destructive tax and regulatory measures from Congress and the White House – make matters worse.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His latest book is The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist.


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