April 14, 2022
The New York Times headlined a piece on March retail sales “retail sales grew in March as inflation soared.” This might lead readers to believe that we had strong retail sales in March, in spite of high inflation.
In fact, if we pull out sales of gas, retail sales actually fell 0.3 percent. This drop is before adjusting for higher prices. The core consumer price index for goods (excluding food and gas) rose 0.3 percent in March, with food prices rise 1.0 percent. If we assume that the average price rise for the non-gas index was 0.4 percent, then real retail sales fell 0.7 percent in March.
Monthly data on retail sales are erratic and subject to large revisions, but contrary to the picture presented by the headline, the data released by the Commerce Department today suggest a rapidly slowing economy.