Original Article By “Sundance” At TheConservativeTreehouse.com
The U.S. Census Bureau {LINK} reports the March retail sales data {pdf LINK} showing a contraction in sales overall (excluding gasoline) and a massive contraction in on-line sales. As we expected, we are seeing the continued demand side contraction for non-essential purchases.
First, when you review the data, keep in mind all of the statistics are based on dollars. Currently the BLS calculates the rate of inflation at 8.5 percent year over year. So, when we look at retail sales figures, we must remember the items being sold cost more. Any reported sales figures in a sector that do not exceed the inflation in that sector, indicates decline in units sold.
The top-line for March retail sales is 0.5% growth; however, the rate of inflation is 8.5%, so the amount of goods sold is substantially less than the 0.5% dollar increase would indicate. Subtract the sales of gasoline (w/ massive price increases), and retail sales are negative (-0.3%) in March. SEE TABLE-2
A good category to note the contraction in non-essential purchases is electronics and appliances. Again, CORE inflation in that segment is around 6%, and yet total sales were only 3.3% higher, meaning less actual units sold. Compared to 2021, electronics and appliance sales dropped 9.7%.
Showing how much people are pinched, gasoline prices are around 60% higher than this time last year, yet gas station sales only increased by 8.9%. This means people are buying a lot less fuel at much higher prices. People have shifted their transportation habits because gas costs so much.
Two more very interesting notes:
Food and beverage stores only reflected a 1.0% increase in sales, amid massive inflation in that sector. People are buying less food at higher prices. The year-over-year rate of retail sales increase for supermarkets is 8.4%, however, prices in the grocery store are well beyond 20%. Again, food prices are changing shopping habits. You can see the same trend in Health and Beauty Care products. Consumers are being thrifty and prioritizing their expenses away from non-essentials.
Secondly, perhaps the most obvious shift in consumer spending is noted in on-line (nonstore) retailers. March retail sales dropped 6.4 percent for on-line shoppers, again as a consequence of much higher on-line prices and some product unavailability.
The bottom line of the Retail Sales report is not unfamiliar to us. What we are seeing is a lessening in overall consumer spending, as the costs for food, fuel, energy and housing have skyrocketed. The demand for non-essential purchases is what we would naturally expect to see amid a nation having to make tough purchasing decisions based on inflation.
The economic policy of the people behind Joe Biden is catastrophic, and it appears to be a feature not a flaw.
That said, wise people -including people here- know how to extend their budgets and make use of raw ingredients for multiple purposed meals. Keep doing that as much as possible to offset the dramatic increases in price. Look for sales, use coupons, multipurpose products and be smart with purchase decisions.
We can and will get through this together.
