Retail sales increase

Retail sales in June 2018 were $437,527 million. Retail sales in June 2019 were $448,992 million. Good growth. Steady growth. For most Americans the summer of 2019 felt like a prosperous time.

Retail sales for June 2022 were, according to this morning’s US Census Bureau survey, $594,499 million. (See chart below for 2018 to current, seasonally adjusted.) This is a new, inflation-fattened record.

A generous extension of 2015-2019 sales might have us buying about $500,000 million last month. Instead we spent one-fifth more than pre-pandemic trends. Given the unusual amount of cash burning in our pockets (top 1 percent, bottom 50 percent, and more), this is not surprising (warning: Fed data not updated since 1st Quarter, but still…) Given strong employment and steady wage growth, any sharp decline in spending would be surprising.

But no wonder we have continued supply chain challenges. I had really hoped for a continuation of May’s very modest softening in sales. Given this level of demand, I am even more impressed with current fulfillment.

No wonder Wednesday’s Consumer Price Index found such significant inflation.

Contemporary economies are addicted to growth. There are good reasons (and good outcomes). But every addiction has its dark side. Inflation is the current shadow. The possibility of recession preoccupies the imagination of many. But I will suggest, just several months of steady could be a sunny tonic.