ISHP - Retail Sales Dip A Tad In Feb. After Huge Spike In Jan. Year-Over-Year

2023-03-15 22:12:00 ET

Summary

• Retail sales in February dipped 0.4% from the huge spike in January, to $698 billion.
• So is this tiny dip in February off the huge spike in January a sign that consumers are tapped out?
• Consumers are still spending like drunken sailors, especially online, now that they don’t have to blow so much on gasoline anymore.

Consumers are still spending like drunken sailors, especially online, now that they don’t have to blow so much on gasoline anymore.

Retail sales in February dipped 0.4% from the huge spike in January, to $698 billion, seasonally adjusted, the second highest ever, just a hair below January, when sales had spiked by 3.2%, preceded by declines in December and November, and by a jump in October. You see, this data is volatile.

So is this tiny dip in February off the huge spike in January a sign that consumers are tapped out? Nah, goods inflation has subsided, gasoline got cheaper than it was a year ago, and a whole lot cheaper than it was in June, durable goods prices have dropped, as inflation has shifted into services , and consumers are still spending like drunken sailors, now that they don’t have to blow so much of their money on gasoline anymore:

Year-over-year, retail sales rose 5.6%, not seasonally adjusted, even as inflation in many goods that retailers sell was negative, such as for many durable goods and gasoline.

Retail sales by category, seasonally adjusted

New and Used Vehicle and Parts Dealers (19% of total retail):

• Sales: $131 billion
• Month over month: -1.8%
• Year-over-year: -0.2%
• CPI used vehicles: -2.8% for the month, -13.6% year-over-year
• CPI new vehicles: +0.2% for the month, +5.8% year-over-year.

Ecommerce and other “nonstore retailers” (16% of total retail sales), ecommerce retailers, ecommerce operations of brick-and-mortar retailers, and stalls and markets:

• Sales: $113 billion
• Month over month: +1.6%
• Year-over-year: +8.5%

Food services and drinking places (13% of total retail), includes restaurants, cafeterias, bars, etc.

• Sales: $93 billion
• Month over month: -2.2% after the huge +7.2% spike in January.
• Year-over-year: +15.3%
• CPI for “food away from home”: +8.4% year over year:

Food and Beverage Stores (11.6% of total retail):

• Sales: $81 billion
• Month over month: +0.5%
• Year-over-year: +5.5%
• CPI for “food at home”: +0.3% month-to-month, +10.2% year over year:

General merchandise stores, without department stores (8.9% of total retail):

• Sales: $62 billion
• Month over month: +1.4%
• Year-over-year: +12.1%

Gas stations (8.4% of total retail):

• Sales: $58 billion
• Month over month: -0.6%
• Year-over-year: -1.9%
• CPI for gasoline: -2.0% year over year:

This chart shows the relationship between the CPI for gasoline as index value representing price levels not percentage changes (green) and sales in billions of dollars at gas stations, including all the other merchandise gas stations sell (red, left axis):

Building materials, garden supply and equipment stores (6.1% of total retail):

• Sales: $43 billion
• Month over month: -0.1%
• Year-over-year: +0.6%

Clothing and accessory stores (3.8% of total retail):

• Sales: $27 billion
• Month over month: -0.8%
• Year-over-year: +4.3%
• CPI apparel: 3.3% year-over-year

Miscellaneous store retailers, includes cannabis stores (2.3% of total retail): Specialty stores, from art-supply stores to wine-making supply stores. Cannabis stores are the growth driver in this category.

• Sales: $16 billion, seasonally adjusted
• Month over month: -1.8%.
• Year-over-year: +4.8%
• CPI Cannabis: nope, not yet. But per Cannabis Benchmarks U.S. Spot Index, average prices have plunged 21% year-over-year:

Furniture and home furnishing stores (1.7% of total retail):

• Sales: $12 billion, seasonally adjusted
• Month over month: -2.5%
• Year-over-year: +0.1%
• CPI Household furnishings: 6.3% year-over-year.

Department stores (now down to 1.7% of total retail, as consumers increasingly bought this stuff online, including at the ecommerce sites of the few surviving department store chains):

• Sales: $11.6 billion
• Month over month: -4.0%
• Year-over-year: +2.5%
• From February 2001: -40% despite 21 years of inflation.

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