Retail Trade Report for May 2022

 

Another less than stellar report, as retail trade fell in May, without adjustments for inflationary prices. 

Here is May's Advance Retail Report from the Census Bureau.

Advance Estimates of U.S. Retail and Food Services

Advance estimates of U.S. retail and food services sales for May 2022, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $672.9 billion, a decrease of 0.3 percent (±0.5 percent)* from the previous month, but 8.1 percent (±0.7 percent) above May 2021. Total sales for the March 2022 through May 2022 period were up 7.7 percent (±0.7 percent) from the same period a year ago. The March 2022 to April 2022 percent change was revised from up 0.9 percent (±0.5 percent) to up 0.7 percent (±0.2 percent).

Retail trade sales were down 0.4 percent (±0.4 percent)* from April 2022, but up 6.9 percent (±0.7 percent) above last year. Gasoline stations were up 43.2 percent (±1.6 percent) from May 2021, while food services and drinking places were up 17.5 percent (±4.0 percent) from last year.

Simply put... we have started to spend less and buy even less. Certainly the aforementioned items by the release come into play, but a few added comments from me. M/M and Y/Y.

• Motor vehicle & parts dealers …….……….. -3.52% -3.73%
• Electronics & appliance stores …………….. -1.33% -4.45%
• Nonstore retailers …………………..….……….. -0.98% +6.98%

It would be imprecise to deduct the 1.1% inflation from April or the 8.6% from May 2021, as the inflation rate varied across the many items. However, I did just that in the graph above. It shouldn't be taken as completely accurate, but does provide an indication of things as they stand. That is my opinion on the matter.

An example would be...

       Grocery stores …………………..………..……….. +1.23% +8.71%

The nearest in the CPI report was food at home, with +1.4% May over April and +11.9% Y/Y. It's almost as if people are purchasing less or at least... cheaper options. The thing about food is only so much budget cutting can take place, until you hit bone. 

An example of that would be the CPI decrease in beef and veal, with an upward spike in chicken and fish. It's not necessarily a healthier diet, as fruits and vegetables have hit a pause. 

The report calls out food services and drinking places on an annual basis, but what about monthly...

        Food services & drinking places ……….. +0.67% +17.47%

The monthly increase looks a bit shaky, once inflation is applied and the annual should be no surprise, as we were in the early stages a fully opening back up from Covid.

The bright spot is gasoline, which is not really a bright spot, in my opinion.

So another report into the dustbin. Which way is everything headed? I will wait for the smart people to tell me.