Retail sales without gas stations jumped 0.8% in August from July. Inflation shifted from goods (retail) to services.
By Wolf Richter for WOLF STREET.
There was a sharp drop in sales at gas stations, driven by falling gasoline prices and lower demand for gasoline (which I wrote about yesterday).
But retail sales without gas station sales jumped 0.8% in August from July and have been on a solid upward trend for months, even as inflation moved from goods, sold by retailers, to services, which are not sold by retailers.
Retail sales follow sales of goods, not services. And inflation has shifted from goods to services, and services inflation is now driving headline inflation (which I talked about a few days ago), even though the prices of some goods go down.
The retail sales data provided today by the Census Bureau is based on surveys of approximately 5,500 retail businesses, by retailer category, from a retailer’s perspective, not from a consumer’s perspective.
Overall retail sales rose 0.3% from July, despite lower gas stations, and 9.1% year-over-year to $683 billion (seasonally adjusted) . Compared to August 2019, the last normal year, total retail sales increased by 31.1%.
Inflation at retailers = rising prices. But where?
Retail sales are grouped by retailer categories, such as car dealerships and online sales, not by product category. But CPI inflation is measured by product category. CPI inflation therefore cannot be easily applied to retail sales because the categories do not match.
Headline CPI inflation in August rose 0.1% from July and 8.3% year-on-year. The CPI for services is soaring steadily but does not show up in retail sales because retailers are selling goods.
Gasoline CPI: -10.6% in August from July. But retail sales at gas stations include the other products they sell. Many gas stations are actually convenience stores, selling food, drink and other things, and the drop in gas prices has been moderated by price increases for the other things they sell.
“Food at home” CPI: +0.7% in August from July – which falls under the retailer category of “food and beverage stores”. But Walmart is also a huge grocery retailer, and it’s a “general merchandise retailer,” not a food and beverage store.
CPI for durable goods: +0.5% in August from July. Durable goods are sold by several categories of retailers, including new and used vehicle dealerships, e-commerce retailers, appliance stores, electronics stores, furniture stores, merchandise stores general, etc Their different products face different pricing environments, with some falling prices (ie electronics) and other rising prices (ie new vehicles).
Sales at dealerships of new and used vehicles and parts, the largest category, jumped 2.8% in August from July and 6.8% from a year ago to $128 billion, seasonally adjusted. Compared to August 2019, sales increased by 21%.
It comes from a mix of much higher prices and much lower unit sales as new vehicle dealers still face large-scale inventory shortages, although they have changed, and some brands now have a lot of inventory, while other brands are essentially out of fuel. performance vehicles.
E-commerce sales and other “non-store retailers” fell 0.7% from July’s record, to the second-highest ever, $108 billion, seasonally adjusted, up 11% year-over-year and up 70% compared to August 2019.
Included here are sales from pure e-commerce retailers, physical retail e-commerce operations, and stalls and markets:
Food and Beverage Stores: Sales increased 0.5% for the month and 7.2% year over year to $79.5 billion, up 23% from August 2019:
Food services and drinking places: Sales jumped 1.1% in August from July and 10.9% year-on-year to a record $86 billion. This increased by 32% compared to August 2019. Included here are bars, restaurants, cafes, cafeterias, delicatessens, fast food outlets, etc.
General Merchandise Stores: Sales rose 0.4% for the month and 4.2% year-over-year to $58 billion, up 20% from August 2019. Walmart and Target are among of this category, but not the department stores:
Service stations: Sales fell 4.2% for the month to $64 billion, the second straight month of declines, as gasoline prices fell. Sales were up another 29% from a year ago and 51% from August 2019. Sales at gas stations include the other products they sell: many gas stations are actually convenience stores, selling all kinds of food, beverages, and other things, and the drop in the price of gasoline is moderated by the price increases of their other things.
Stores of building materials, supplies and garden equipment: Sales jumped 1.1% for the month and 10.5% year-over-year to $43 billion, seasonally adjusted, up 36% from August 2019:
Clothing and accessories stores: Sales increased 0.4% for the month and 3.5% year over year to $26 billion, up 16% from August 2019:
Miscellaneous in-store retailers (including cannabis stores): Sales jumped 1.6% for the month, 15% year-over-year and 47% since August 2019, to $16.2 billion:
Furniture and home furnishings stores: Sales fell 1.3% for the month and 1.6% year-over-year to $11.8 billion. This was still up 16% from August 2019:
Department stores: Sales rose 0.9% for the month and just 0.7% year over year, and were essentially flat from August 2019 at $11.4 billion. Compared to the department store peak of 2000, sales are down 43%. Many department stores, from Sears to Descendants, filed for bankruptcy and mostly disappeared. Anything you can buy in a physical department store, you can buy online, including on that chain’s website, and that’s where these sales went:
Sporting goods, hobby, book and music stores: Sales increased 0.5% for the month and 5.5% year over year to $9.3 billion, up 38% from August 2019:
Electronics and appliance stores: Sales fell 0.1% for the month and 5.7% year-over-year to $7.6 billion, which was flat from August 2019.
In this category are only electronics and appliance stores, such as the physical stores of Best Buy or the physical stores of Apple. It does not cover other retailers that sell electronics and appliances, or online sales of electronics and appliances. This category of bricks and mortar is also on its way out, with sales now down 15% from 15 years ago:
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