Americans are making huge efforts to keep up with soaring prices

Retail sales amid record-worst durable goods inflation and searing non-durable goods inflation.

By Wolf Richter for WOLF STREET.

February and January are the worst months of the year for retailers, after the huge holiday frenzy. Large seasonal adjustments attempt to smooth out the dips of these two months from the frenzy of November and December.

And for the past 14 months, we’ve got a new biggie in the mix: record inflation rage in durable goods and a huge surge in inflation in non-durable goods.

Not seasonally adjusted, retail sales, at $577 billion in February, were up 17.7% from February last year, according to the Census Bureau today. This was a huge massive gain, showing that Americans are spending heavily to keep up with price increases:

Seasonally adjustedRetail sales rose 0.3% in February from January to a record $658 billion, on top of January’s peak, and were up 17.6% year-on-year other :

But there is the big problem: galloping inflation.

Retail sales are the sales of goods, both durable goods (such as cars, electronics and tools) and non-durable goods (such as food, household supplies and gasoline). Retail sales do not include services such as health care, rent and airline tickets. Retail sales here are not adjusted for inflation.

The Consumer Durables Price Index jumped 18.7% in February (red line in chart below), by far the highest in data dating back to the 1950s. Much of it was the ridiculous surge prices for new and used vehicles.

The CPI for non-durable goods jumped 10.7%, the highest since July 2008 (purple line). The current spike in gasoline prices since late February has not yet entered the index.

Thus, the year-over-year jump in retail sales of 17.6% should be viewed in light of price increases for durable goods of 18.7% and non-durable goods of 10.7%. Meaning: consumers are making heroic efforts to spend what they have and earn and can borrow to keep up with inflation, and maybe spend a little more on top of inflation:

Sales at dealerships of new and used vehicles and parts: soaring prices, falling unit sales.

In dollar terms, sales at new and used vehicle and parts dealers, the largest category of retailers, rose 0.8% seasonally adjusted in February from January, to $135 billion. Unadjusted for seasonality, sales rose 2.6% month-over-month to $121 billion. Compared to a year ago, sales jumped 17.7%, a huge jump.

But used vehicle prices have soared 41% year over year, according to the CPI; and new vehicle prices jumped 12.4%. So the dollar sales gains were all based on higher prices and a shift to higher-end, more loaded models that manufacturers prioritized.

But the number of vehicles delivered to end users has fallen. The number of used vehicles sold to retail customers in February fell 7% year over year, according to Cox Automotive. And the number of new vehicles sold fell 12% year over year, to a seasonally adjusted annual rate of 14.1 million new vehicles:

The other categories retail in order of sales volume.

E-commerce sales and other “non-store retailers” the second-largest category, jumped 13.8% year-over-year in February to $96 billion seasonally adjusted, down 3.7% from January’s record:

Food and beverage stores: sales fell 0.5% for the month, seasonally adjusted, at $78 billion. Year-over-year, sales jumped 7.9%, while the food-at-home CPI jumped 8.6%:

Food services and drinking places: sales increased by 2.5% for the seasonally adjusted month, to a record $74 billion. Year over year, sales increased by 33%:

General merchandise stores: sales down 0.6% for the month at $58 billion, seasonally adjusted, and rose 10.9% year-over-year. Walmart and Costco are in this category, but not major stores.

Service stations: sales jumped 5.3% for the month to a seasonally adjusted record $57 billion, driven by the 6.6% spike in gasoline prices. Year-over-year sales were up 36%, boosted by a 38% spike in gasoline prices. In other words, the growth in sales at gas stations is entirely due to higher prices:

Building materials, gardening supplies and equipment stores: sales increased 0.9% for the month to a record seasonally adjusted $43 billion, up 14.8% from a year ago.

Clothing and accessories stores: sales increased by 1.1% for the month, at $26 billion, seasonally adjusted, and up 31% year-over-year:

Miscellaneous in-store retailers, including cannabis stores: Sales jumped 1.9% for the month to a record $15.5 billion (seasonally adjusted), up 25% from a year ago. This category tracks specialty stores, such as cannabis products, beer brewing supplies, telescopes, art supplies, and more.

Department stores: sales up 1.6% for the month, at $12 billion (seasonally adjusted) and was up 23% year over year. From the peak of 2000, sales have fallen 39% as Americans have abandoned this type of retailer. Countless department stores have been closed over the past 10 years, and many regional and national chains have been liquidated, with only a small number of survivors:

Furniture and home furnishings stores: sales fell 1.0% for the month, at $12 billion (seasonally adjusted), but up 7.4% year-over-year:

Sporting goods, hobby, book and music stores: sales increased 1.7% for the month, at $9.0 billion (seasonally adjusted), and were up 11.7% year-over-year:

Electronics and appliance stores: sales fell 0.6% for the month, at $7.3 billion, seasonally adjusted, but up 2.6% from a year ago. Sales of consumer electronics and appliances are huge, but are spread across many store types, such as Costco, Walmart, and Home Depot, and much of the sales have shifted to e-commerce. This category here only covers sales at brick-and-mortar specialty stores, such as Best Buy.

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