(10-15-21) Another Monthly Gain Builds on a Remarkable if Somewhat Unsteady Year for Sales. Retail sales rose 0.7% in September with broad-based gains across store types and upward revisions to prior months. Despite wilting expectations for economic growth, today’s better-than-expected retail sales report is a reminder that while retailers still face supply chain and other problems, consumers are still flush with cash and ready to spend. That said, the better-than-expected outcome needs to be taken in the context of sharply higher prices for many consumer goods in an environment where scarcity, shortages, and “out of stock” signs have become a regular part of the post-COVID retail landscape. On an inflation-adjusted basis, we expect consumer spending to slow to a crawl in the third quarter. Still, the broad-based growth (only two of 13 store types posted declines) is a sign that consumer spending may yet prove to be a growth driver in the final months of the year. What goes unnoticed is just how much stronger sales have been this year given the massive boost from the stimulus checks earlier in the year. Consider, for example, that in the first nine months of the year overall retail sales are running more than 20% ahead of sales at this time last year. This dynamic is evident (to a lesser degree) in the store types that make up Holiday Sales. In fact, if sales were flat in the final months of the year, holiday sales would rise 13% compared to last year. The challenge for retailers and holiday shoppers alike will be finding goods that are in increasingly short supply.
Retail Sales – Advanced Estimates (10-15-21)
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