Retails Sales Up in Two Consecutive Months – Inflation Neutralizes Gains

By at 15 April, 2024, 5:04 pm

by Raymond J. Keating –

Retail and food services sales grew for the second straight month in March.

As reported by the U.S. Census Bureau, retail and food services sales – seasonally adjusted but not adjusted for inflation – grew by 0.7 percent in March, following on an upwardly revised 0.9 percent growth in February.

Source: Federal Reserve Bank of St. Louis, FRED

While inflation (as measured by CPI) ran hot in February and March – registering 0.4 percent in each month – retail and food services sales did grow in real terms. These two months of growth were welcome, given the declines suffered from October 2023 to January 2024.

It must be pointed out, however, that most of the 4.0 percent gain in sales experienced over the past year was wiped out due to inflation (which ran at 3.5 percent).

Finally, among major sales categories, the big gainer over the most recent month and the past year has been nonstore retails sales – mainly, online sales – which was up by 2.7 percent in March 2024 versus February 2024, and by 21.3 percent compared to March 2023.

Meanwhile, the biggest decline came in “sporting goods, hobby, musical instrument, & book stores” sales – off by 1.8 percent versus February 2024 and by 3.9 percent compared to a year earlier.

The American consumer’s predisposition to spend has long been strong, to the point that various surveys will point to concerns as to where the economy is or might be headed (see here and here, for example), and yet, spending can be strong. No doubt, the reality of continuing job growth plays a part, but also, there is the simple reality of expressing concerns but not having those concerns reflected in actions taken.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His latest books on the economy are The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist, The Weekly Economist II: 52 More Quick Reads to Help You Think Like an Economist and The Weekly Economist III: Another 52 Quick Reads to Help You Think Like an Economist.


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