US Retail Sales Growth Slowest In 13 Months As Online Spending Plunged

Americans’ credit cards are taking a beating – as was evident in the plunge in the savings rate and the surge in revolving consumer credit – to enable them to keep the dream alive and spend beyond their means and that over-reach enabled them to increase retail sales spending by 0.5% MoM – as expected in March. Notably, the rise in retail sales year-over-year is decelerating dramatically (up only 6.9% YoY – the lowest since Feb 2021)…

Source: Bloomberg

The relative weakness was driven by a huge drop in non-store retailer sales (online) MoM leaving sales up just 1.8% YoY.

However, before everyone celebrates this rise in retail sales, we note that the ‘Control Group’ – which filters to the GDP calculation – unexpectedly dropped 0.1% MoM (vs a 0.1% MoM rise expected).

Both goods and services sales growth slowed dramatically in March…

Source: Bloomberg

Finally, as a reminder, retail sales data is nominal – i.e. not adjusted for inflation. While the two data series are not ‘fungible’ per se – i.e. not weighted the same by product – we can get some idea of ‘real’ retail sales by reducing the headline data by CPI… It was negative for the second straight month…

Source: Bloomberg

Additionally, the March advance was led by a 8.9% jump in spending for gasoline. Excluding receipts at gas stations, sales fell 0.3% last month.

Source: Bloomberg

Of course, don’t forget that real wages growth has been negative for 13 straight months.




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