US Retail Sales Report, Current Statistics, and Recent Trends

Retail Sales Rebound in May

retail sales
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The U.S. Retail Sales Report measures the U.S. retail industry each month. The U.S. Census Bureau surveys 4,900 to collect retail sales data. It shows the total sales and the percent change for that month. It also reports on the percent change in year-over-year (YOY) sales for the last 12 months.

Retail sales signal trends in consumer spending. It drives almost 70% of economic growth. The industry supplies 52 million jobs. In addition to retail, personal consumption expenditures include services like housing and health care. 

Current Statistics

U.S. retail sales rose by 1.2% in July 2020. Shoppers returned to reopened stores that had closed in April to keep people safe during the coronavirus pandemic.

YOY retail sales were up 2.7%. That's almost the 3% retail sales growth generated by a healthy economy.

Clothing store sales grew 5.7% for the month, and down 35.7% for the year. Furniture store sales were flat for the month, 9.7% lower than last year. Sporting goods and hobby store sales decreased 5.0 % for the month, but up 11.9% YOY.

Department stores rose by 0.1%, although still down 17.4% for the year. Many well-known department stores had declared bankruptcy in May due to high debt entering the pandemic. These included J. Crew, JCPenney, and Neiman Marcus.   These stores plan to remain in business.

Restaurant and bar sales were up 5%, as many reopened inside-dining with social distancing. Their sales were 26.5% lower than last year.

Gas station sales rose by 6.2%. The Census Bureau doesn't adjust its statistics for inflation. Oil prices drive 54% of gas prices. The latest oil price forecast is for slightly higher prices.

Drug stores, an essential service, saw an increase in sales of 3.6%. They are down 1.8% for the year. Auto dealers' revenue was down 1.3%. Building material and garden supply store sales fell by 2.9%.

Grocery stores, an essential service, saw sales rise by 0.4% in July. That's still a 12.6% annual increase.

Online sales rose by 0.7% in July, but it's still 26.1% higher than last year.

The Retail Sales Report Predicts Economic Growth

Retail sales are used to predict consumer spending trends. That's because the report comes out monthly. U.S. economic growth, as measured by gross domestic product, is reported quarterly. Therefore, the retail sales report is a more current measurement of economic health.

You can use the retail sales report to predict GDP before that news comes out. Keep in mind that the retail sales report doesn't adjust for inflation, while GDP does.

To predict GDP, look at year-over-year retail sales. 

GDP is an annualized number. GDP growth compares this annualized figure to the prior year. 

Keep in mind that GDP growth uses real GDP figures. They eliminate the effects of inflation. The YOY retail sales reports use nominal GDP figures. GDP growth reports and YOY retail reports could have significant differences if inflation is very high or if there is deflation

When using the retail sales report for forecasting, you should also look at other statistics. Most importantly, look at orders for durable goods. That's another great leading economic indicator. 

About 20% of annual retail sales occur during the holiday season.

Pay attention to forecasts for specific holiday sales. The National Retail Federation surveys shoppers to find out how much they plan to spend on the major holidays. The report on Halloween spending provides early clues for the holiday shopping season. The NRF also reports on retail sales for Valentine's Day, Mother's Day, Father's Day, and Back to School. 

Retail Sales Outlook

In March 2020, the National Retail Federation predicted that the industry would lose $430 billion in revenues in the third quarter of 2020. At least 630,000 non-essential retail outlets closed during the pandemic. Simon, the largest U.S. mall operator, closed over 200 shopping centers.

In February 2020, the NRF had predicted 2020 retail sales would grow between 3.5%-4.1%. That was before most states issued shelter-in-place orders.

Jan Rogers Kniffen, a retail industry consultant, estimated that 30 well-known brands might be forced to file for bankruptcy protection. Many retailers will have trouble meeting loan obligations. Apparel retailers will have a hard time selling out-of-season apparel. They may have to cancel orders with manufacturers.

Most retailers will gradually recover once the shelter-in-place orders are lifted. The exception could be those, like indoor dining, that can't institute social distancing. A real recovery won't occur until a safe and effective vaccine is developed. In this pandemic, the future of retail depends on a virus.

Article Sources

  1. Federal Reserve Bank of St. Louis. "Personal Consumption Expenditures." Accessed June 16, 2020.

  2. U.S. Chamber of Commerce. "Experts Unpack the Massive Cross-Industry Impact of the Coronavirus, From Retail to Hospitality." Accessed June 16, 2020.

  3. U.S. Census Bureau. "Advance Monthly Sales for Retail and Food Services." Accessed August 14, 2020.

  4. International Council of Shopping Centers. "What Retailers Are Doing During the Pandemic." Accessed May 16, 2020.

  5. Nieman Marcus Group. "Neiman Marcus Group Enters into a Restructuring Support Agreement with a Significant Majority of its Creditors to Substantially Reduce Debt and Position the Company for Long-Term Growth." Accessed May 16, 2020.

  6. J.Crew. "J.Crew Group, Inc. Announces Comprehensive Agreement to Deleverage Balance Sheet and Position J.Crew and Madewell for Long-Term Profitable Growth." Accessed May 16, 2020.

  7. JCPenney. "JCPenney to Reduce Debt and Strengthen Financial Position Through Restructuring Support Agreement." Accessed May 16, 2020.

  8. U.S. Energy Information Administration (EIA). "Factors Affecting Gasoline Prices." Accessed May 16, 2020.

  9. U.S. Energy Information Administration. "Short-Term Energy Outlook." Accessed August 14, 2020.

  10. Bureau of Economic Analysis (BEA). "Gross Domestic Product." Accessed April 16, 2020.

  11. U.S. Census Bureau. "Why New Data on Durable Goods Matter," Accessed April 16, 2020.

  12. National Retail Federation. "Retail Holiday and Seasonal Trends." Accessed Jan. 10, 2020.

  13. PYMNTS. "Coronavirus Closures Affect 630,000 Retail Businesses." Accessed May 16, 2020.

  14. Coresight Research. "U.S. Retailers Teeter on the Brink." Accessed May 16, 2020.

  15. National Retail Federation. "NRF Says Consumers Continue to Drive Economy, Forecasts Retail Sales Will Grow 3.5%-4.1%." Accessed May 16, 2020.