Retail Sales: What a “boom” doesn´t look like

Retail Sales in January 2018 rose by a little over 3.5% year-over-year. That followed sharp downward revisions to December. The truth is that almost all the gain was registered during September to November – the hurricane boost.

Month-over-month, retail sales declined in January after being revised to flat in December. It´s almost as if US consumers have taken two months off from spending.

Obviously not. Rather, retail sales (just as several other statistics) captured the burst of activity triggered by the cleanup and recovery from the severe storms along the Gulf Coast in later summer 2017.

In the seven months prior to September, retail sales had increased by less than 1%. That was far more consistent with recent estimates for income, which has remained flat over the period.

Now we´re back to the “calm after the storm”. That baseline is the opposite of an “economic boom”, especially one that is being described as “led by consumer spending”.



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