Year-on-Year Real Retail Sales Decline Despite 'Seasonally-Adjusted' September Surge

Expectations of a Retail Sales Surge

In anticipation of the retail sales report, experts at BofA advised to prepare for a significant increase in retail sales, predicting a substantial 0.8% month-on-month (MoM) rise in spending. This prediction was attributed to seasonal adjustments and was significantly higher than the 0.2% consensus.

Hot Retail Sales Cohorts

The prediction by BofA was mostly accurate with all the retail sales cohorts showing a strong performance. The headline retail sales increased by 0.4% (0.3% expected), ex-autos by 0.5% MoM (0.1% expected), and most notably, the control group (which contributes to the GDP calculation) increased by 0.7% MoM (0.3% expected).

Year-on-Year Print Drops

Despite the MoM beat in headline retail sales, the year-on-year (YoY) print did not show improvement. Instead, it dropped to +1.7% YoY, marking the weakest performance since January.

Shocking Fall in Unadjusted Retail Sales

On an unadjusted basis, retail sales experienced a significant 7.5% MoM decline.

Rise in Core Retail Sales

Despite the overall decline, core retail sales saw a 4.0% YoY increase.

Varied Spending Trends

Spending patterns varied across different sectors. Gas stations and furniture stores saw a MoM decrease in spending, while food services and food & beverage stores experienced the most significant increase in spending.

Flat Unadjusted Retail Sales

On an unadjusted basis, retail sales remained flat (0.0%) YoY. This implies that real retail sales were notably down on a YoY basis.

Bottom Line

With these figures in mind, the question arises - is retail spending 'hot', or is inflation impacting personal incomes more than many think? It's a thought-provoking question that invites further discussion and analysis. What are your thoughts on this matter? Feel free to share this article with your friends for their input. Don't forget to sign up for the Daily Briefing, which is delivered every day at 6pm.