Reclaiming Common Sense

Th Monthly and Annual Retail Trade Survey (MARTS) data was released for August. This column, in the article "Retail Forecast: Over 5% Growth" was anticipating month to month growth in all sectors except food and beverage stores (FBS) and food and drinking places (FDP.) The same article was anticipating that all sectors would see an increase in sales August to August except Sporting goods, hobbies, and books (SGHB.) The projections were for total August to August same month growth, for the past 12 months sales growth, and for the current year growth to all exceed 5%.

The August to August Growth saw growth in all sectors except Sporting Goods, Hobbies, and Books. Food and Drinking Place jumped over 11% and Food and Drinking Stores were up almost 5%. Non-store retail surged over 9%. Clothing stores surged. There was an over 20% surge in gasoline station sales as compared to August of 2017. August sales were up 6.85% from last August.

All sectors had higher Annual Sales, January through July, other than Sporting Goods, Hobby, and Books. The current year growth exceeded 10% for non-store retail, up almost 5% for furniture and furnishings, and another 4% for Building Material and Garden Equipment. The current year sales, through August, are up 5.73%.

The past year has seen an annual growth rate of 5.29%. The situation where the current month growth rate is larger, faster, than the current year growth rate, and the situation where the same month growth rate is faster than the current year growth rate means that the economy is expanding. This data, and all the data discussed so far, is the non-seasonally adjusted data. The media is reporting the seasonally adjusted data.

Both June and July saw upward revisions to their total sales. The June data was revised downward last month with the release of the July MARTS report. This month that data was re-revised higher by almost a half a billion dollars. The July data was revised higher by 1 billion dollars.

We are in a Retail Renaissance. All sectors except "Electronics and Appliances," "Sporting Goods, Hobbies, and Books, and Gasoline Stations had their best August sales months ever. We are experiencing 5% growth no matter how you measure it. We have only had one retail recession since 1992. We are nearly certain to exceed $6 trillion in retail sales for the first time in any given year. Retail sales are growing faster than inflation. This growth may continue through this year and possibly through next year. This growth should be reflected in the third quarter GDP data. Another factor to consider is that the damage created by Hurricane Florence will be costly. There will be a spike in retail sales recorded for September and for the upcoming months as people splurged to prepare for, and to clean up from, the hurricane.

Stay Safe.