Indicator 6 – Retail Sales

13 Mar

Referred to fully as “Retail Trade Sales and Food Services Sales,” this data tracks monthly U.S. retail and food service sales, details changes from previous periods and identifies in which sectors sales increased and/or decreased. The data is based on a random sampling of 5,000 retail and food service firms, and captures in-store sales as well as catalog and other out-of-store sales. The report also breaks down sales figures into groups such as food and beverages, clothing, furniture, electronics and automobiles. Auto sales are separated from the data because of their volatility, which can sometimes obscure the underlying pattern of spending.  The data can be found at and provides a broad view of retail markets for analysis.

The numbers measure consumers’ personal consumption across retail industries and track growth or deceleration of personal consumption spending, which makes up approximately two-thirds of the annual U.S. GDP – our first economic indicator.  Analysts use the data to help track consumer spending trends, and forecast the direction and magnitude of future spending.

Remembering back, I started this thread on economic indicators to help answer the question “when will the economy recover?”  So let’s see if this indicator provides any incite.  This first chart shows the complete series from 1992, when the U.S. Census Bureau began tracking the data.  Recessions have been highlighted to include the approximate range of two major economic episodes.


The Tech Crash that began in the spring of 2000 had relatively little impact on consumption. The Financial Crisis of 2008 has had a major impact.  After the cliff-dive of the Great Recession, the recovery in retail sales has taken us (in nominal terms) 11.2% above the November 2007 pre-recession peak.

But the next chart gives us a perspective on the extent to which this indicator is skewed by inflation and population growth.  The nominal (or unadjusted) sales number shows a cumulative growth of 156.8% since the beginning of this series.  Adjust for population growth and the cumulative number drops to 107.7%. And when we adjust for both population growth and inflation, retail sales are up only 24.2% over the past two decades.


During a week in which unemployment fell and the Dow Jones Industrial Average continued its climb to historic highs, one might be tempted to say we’ve recovered.  What do you think?

One Response to “Indicator 6 – Retail Sales”

  1. recrais 03/13/2013 at 21:31 #

    Well said Professor McCaffrey!

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