Retail Sales Up 0.2%! Well, Kind Of

Many outlets are reporting that retail sales are up 0.2% when economist were expecting them to be flat at best. Don't forget that retail sales are given in nominal terms (not real terms), and are not adjusted for inflation. For instance, if you buy the same quantity of items, but they are 3% more expensive, retail sales will be up 3%. Digging deeper in the data we find that we spent less on furniture, clothing, and appliances (new things we don't need, at least not right now), and more on food and gasoline (things we do need). As it turns out, excluding gasoline, sales were unchanged, which was probably better than expected. We also probably bought less gas, but it was up 11% this year (6.9% in February), resulting in higher overall retail sales numbers.