Actual, nominal retail sales grew at the robust annual rate of 4.8% after posting the best April performance since 2009. But there’s a problem with that.
Nominal Retail Sales Growth at 4.8% – Click to enlarge
Forget the seasonally adjusted headline number of a gain of 0.1% which missed conomists’ expectations of a 0.3% gain. Seasonally adjusted data is fiction designed for mass consumption. It is an excuse for lazy financial journalists to dispense with reporting actual facts because they assume, incorrectly, that you are too stupid to understand them.
In reality, April is virtually always a down month versus March. The fact is that this April’s actual, not seasonally adjusted month to month decline of 1.1% was far stronger than last year’s April drop of 2.9%, and also much stronger than the 10 year average April drop of -2.1%. This April was a very good month in nominal terms. The 4.8% annual growth rate is smack in the middle of the growth rate range of the past two years. 4.8%. That’s nearly 5 times the rate of US population growth.  It’s all good, right?
That’s in total nominal terms. It includes inflation. It is heavily skewed by the spending of the top 10% of households in wealth. It is boosted by growing tourism revenue. It does not represent the average American household.
The problem is that the average, real, inflation adjusted retail sales per capita, ex-gasoline 1, is growing far more slowly, and has not even recovered to the 2003 level. 2003, if you recall was at the bottom of a recession. Retail sales growth per capita has been stagnant for the past 11 years. This coincides with the well known data on real US household income which has been in a declining trend since 1998. The worst of that decline, by the way, occurred between 2007 and 2011, a period during which the Fed began offering free money to banksters, and printing money madly.  And you think that’s a coincidence?
