• 658 days Will The ECB Continue To Hike Rates?
  • 658 days Forbes: Aramco Remains Largest Company In The Middle East
  • 660 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 1,060 days Could Crypto Overtake Traditional Investment?
  • 1,065 days Americans Still Quitting Jobs At Record Pace
  • 1,067 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 1,070 days Is The Dollar Too Strong?
  • 1,070 days Big Tech Disappoints Investors on Earnings Calls
  • 1,071 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 1,073 days China Is Quietly Trying To Distance Itself From Russia
  • 1,073 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 1,077 days Crypto Investors Won Big In 2021
  • 1,077 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 1,078 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 1,080 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 1,081 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 1,084 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 1,085 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 1,085 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 1,087 days Are NFTs About To Take Over Gaming?
  1. Home
  2. Markets
  3. Other

What's Down With Nominal Retail Sales Growth?

Asha will do her usual excellent job of synthesizing the February retail sales report and highlighting the important implications of it. But I wanted to call your attention to an interesting trend change in retail sales. As shown in the chart below, the trend in nominal retail sales is down. The year-over-year change in the 3-month moving average of nominal retail sales was 3.69% in February (read off the left-hand scale), down from its peak growth of 9.25% in August 2005 and the slowest growth since June 2003. Why the pronounced downward trend in the growth of nominal retail sales? Well, perhaps because of the downward trend in overall consumer inflation, largely as a result of the decline in oil prices from their 2006 peak of $75 a barrel. But why would the decline in oil prices be associated with a decline in the growth of nominal retail sales? Won't folks spend their gas pump savings at the mall, thus maintaining the growth in nominal retail sales? Perhaps some folks are starting to develop anxiety about their finances and are depositing their gas pump savings into a savings account at a bank? Whatever the reason for the current sharp slowing in the trend of nominal retail sales growth, past such sharp slowing trends have typically been associated with declines in the federal funds rate - presumably purposely engineered by the Fed - and/or recessions. But it's probably just the weather this time.

 

Back to homepage

Leave a comment

Leave a comment