November 17, 2020

.Retail sales rose 0.3% in October after having jumped 1.6% in September, 1.4% in August and 1.1% in July.   Sales did slow in October after dramatic increases in each of the previous five  months.  What is truly amazing is that the level of sales has not only rebounded sharply, it is higher than it was going into the recession.  In fact, the level of sales is at a record high level as consumers catch up on some of those purchases that were deferred during the recession.  Over the past year retail sales have risen 5.7%. From 2010 through the end of 2019 the average yearly increase was 4.3%.  So despite a pandemic, sales are climbing more quickly now than they have risen on average in the decade since the recession ended.

Sometimes sales can be distorted by changes in autos and gasoline both of which can be quite volatile.  In this particular instance car sales rose 0.4% while gasoline sales rose 0.4%.   This means that retail sales ex autos and gas, sometimes known as “core retail sales” rose 0.2% in October after having climbed 1.2% in September, 1.5% in August and 1.3% in July.  In the past year these sales have risen 6.5%.  Since the end of the recession this so-called “core:” retail sales measure has risen 4.1%.

Sales gains in October were moderate in most sectors.  After strong gains in the past five months, food services and drinking places fell 0.1% in October.  This category rose 2.4% in September, 4.2% in August, and 4.2% in July.  However, it remains 14.2% below its year ago level.  In contrast, total retail sales is 5.7% higher than it was in October of last year.

At the end of last year non-store retailers were 12.8% of the total retail sales.  They surged to 19.2% in April when most other stores were shut by the virus, but have backed down to 15.9% by October.

Q2 GDP decline 31.4%.  However, workers  gradually returned to work and fiscal stimulus caused GDP to surge by 33.1% in the third quarter and we expect it to climb an additional 10.0% in Q4.

Stephen Slifer

NumberNomics

Charleston, SC