Retail sales without gas stations jumped 0.8% in August from July. Inflation shifted away from goods (retailers) to services.
By Wolf Richter for WOLF STREET.
There was a big drop in sales at gas stations, driven by a plunge in gasoline prices and a drop in demand for gasoline (both of which I discussed yesterday).
But retail sales without sales at gas stations jumped by 0.8% in August from July, and has been on a solid upward trend for months, even as inflation has shifted from goods, sold by retailers, to services, which are not sold by retailers.
Retail sales track sales of goods, not of services. And inflation has been shifting from goods to services, and services inflation is now driving overall inflation (which I discussed a couple of days ago), even as some goods prices are coming down.
The retail sales data today by the Census Bureau are based on surveys of about 5,500 retail businesses, by retailer category, from the retailers’ point of view, not the consumers’ point of view.
Overall retail sales rose by 0.3% from July, despite the drop at gas stations, and by 9.1% year-over-year, to $683 billion (seasonally adjusted). Compared to August 2019, the last normal year, total retail sales were up by an astounding 31.1%.
Inflation at retailers = price increases. But where?
Retail sales are grouped by categories of retailers, such as auto dealers and ecommerce sales, and not by product category. But CPI inflation is measured by product category. So CPI inflation cannot be easily applied to retail sales because the categories don’t match.
Overall CPI inflation in August rose by 0.1% from July, and by 8.3% year-over-year. The CPI for services is spiking relentlessly but doesn’t figure into retail sales because retailers sell goods.
CPI for gasoline: -10.6% in August from July. But retail sales at gas stations include the other stuff they sell. Many gas stations are in effect convenience stores, selling food, beverages, and other stuff, and the drop in the price of gasoline was moderated by price increases in the other stuff they sell.
CPI for “food at home”: +0.7% in August from July – which falls into the retailer category of “food and beverage stores.” But Walmart is also a huge grocery retailer, and it is part of “general merchandise retailers,” not food and beverage stores.
CPI for durable goods: +0.5% in August from July. Durable goods are sold by several retailer categories, including new and used vehicle dealers, ecommerce retailers, appliance stores, electronics stores, furniture stores, general merchandise stores, etc. Their different products face different pricing environments, with some prices declining (i.e. used vehicles and electronics) and with other prices rising (i.e. new vehicles).
Sales at New and Used Vehicle and Parts Dealers, the largest category, jumped by 2.8% in August from July, and by 6.8% from a year ago, to $128 billion, seasonally adjusted. Compared to August 2019, sales were up 21%.
This comes on a mix of much higher prices and much lower unit sales as new vehicle dealers are still facing large-scale inventory shortages, though they have shifted, and some brands have now plenty of inventory, while other brands are essentially out of fuel-efficient vehicles.
Sales at ecommerce and other “nonstore retailers” fell 0.7% from the record in July, to the second-highest ever, $108 billion, seasonally adjusted, up by 11% year-over-year and up by 70% from August 2019.
Included here are sales by pure ecommerce retailers, by the ecommerce operations of brick-and-mortar retailers, and by stalls and markets:
Food and Beverage Stores: Sales rose 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 by 1.1% in August from July, and by 10.9% year-over-year, to a record $86 billion. This was up by 32% from August 2019. Included here are bars, restaurants, cafes, cafeterias, delis, fast-food places, etc.
General merchandise stores: Sales rose 0.4% for the month, and 4.2% year-over-year, to $58 billion, up by 20% from August 2019. Walmart and Target are in this category, but not department stores:
Gas stations: Sales dropped 4.2% for the month, to $64 billion, the second month in a row of declines, as gasoline prices fell. Sales were still up by 29% from a year ago, and by 51% from August 2019. Sales at gas stations include the other stuff they’re selling: Many gas stations are in effect convenience stores, selling all kinds of food, beverages, and other stuff, and the price drop in gasoline is moderated by price increases in their other stuff.
Building materials, garden supply and equipment stores: Sales jumped by 1.1% for the month, and by 10.5% year-over-year, to $43 billion, seasonally adjusted, up by 36% from August 2019:
Clothing and accessory stores: Sales rose 0.4% for the month and 3.5% year-over-year, to $26 billion, up 16% from August 2019:
Miscellaneous store retailers (includes cannabis stores): Sales jumped by 1.6% for the month, by 15% year-over-year, and by 47% since August 2019, to $16.2 billion:
Furniture and home furnishing 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 by 0.9% for the month, and by just 0.7% year-over-year, and were essentially flat with August 2019, at $11.4 billion. Compared to peak-department-store in 2000, sales were down 43%. Numerous department stores, from Sears on down, filed for bankruptcy and mostly vanished. Anything you can buy at a brick-and-mortar department store, you can buy online, including at that chain’s website, and that’s where these sales went:
Sporting goods, hobby, book and music stores: Sales rose 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 dipped 0.1% for the month, and fell 5.7% year-over-year, to $7.6 billion, which was flat with August 2019.
In this category are only specially electronics and appliance stores, such as Best Buy’s brick-and-mortar stores or Apple’s brick-and-mortar stores. It does not cover other retailers that sell electronics and appliances, and it does not cover ecommerce sales of electronics and appliances. This brick-and-mortar category is also on the slow way out, with sales today down 15% from where they’d been 15 years ago:
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