Retail Sales Not in Tailspin

Retail and food services sales nationwide bounced back 0.9 percent in March after an unexpected dip in February, according to the Census Bureau.

Retail and food services sales nationwide bounced back 0.9 percent in March after an unexpected dip in February, according to the Census Bureau on Tuesday. The bureau adjusts its figures for seasonal variation and holiday and trading-day differences, so the better weather last month didn’t cause the rise. Monthly movements can amount to so much noise, but on the other hand, it’s good news for the economy (and retailers and their landlords) that retail sales didn’t contract for two months in a row. That isn’t the kind of trend that the retail sector needs right now, as it still struggles to overcome the impact of wage stagnation and the slowly growing but unceasing inroads that online sales are making on bricks and mortar.

Take gas sales out of the equation, and the month-over-month increase was a little bit better: up 1 percent. When the entire first quarter of 2015 is compared with the first quarter of 2014, sales were 2.2 percent higher. The difference in retail sales compared with last year was also good news: the bureau said that sales were up 1.3 percent compared with March 2014, but that’s before removing gas from the equation, while held sales totals down quite a lot last year. Do that, and retail sales were up year-over-year a very healthy 4.3 percent. So despite everything, there’s still an overall pattern of growth in retail sales.

As shown by the difference in sales with and without gas, fuel for cars is a distorting factor in retail sales data. Small wonder: gas station sales in March 2015 were down 22 percent compared with a year earlier, and 0.6 percent compared with February. The impact of that kind of price differential will be, on the whole, good for the rest of the retail market, since consumers now have billions to spend on other things. It’s possible, however, that in a few markets—Houston, as the biggest example—the slump in energy prices will affect retail market health, but that’s going to take a while.

Besides gas stations, most retail categories enjoyed higher sales when compared with 12 months ago. Departments stores, however, continued their slide, with sales off 1.1 percent since last year, according to the bureau. It’s a new reality facing department stores: there simply aren’t going to be as many of them by the 2020s as there are now. Electronics stores also took a year-over-year dip in March—down 1.9 percent—though that movement has the markings of a temporary gyration. The Census Bureau’s “non-store” category of retail sales (that is, the Internet) continued doing what it long has done in March: grow. Year-over-year, Internet retail sales was up 3.9 percent.