Retail sales fall sharply in December and February; price-adjusted sales now down sharply in 4 of the last 5 months as recession deepens

Today’s Census report of nominal retail sales receipts for February also revises down sharply their earlier estimate for nominal sales in December and January. Price-adjusted retail sales have now fallen sharply in four of the past five months and even nominal receipts are back to the lowest levels since last August.

This surely eliminates any remaining credibility for those debt industry salesmen and politicians who still deny a recession is underway.

The report now shows retail receipts falling -1.05% behind consumer prices in December vs. earlier estimate of -0.80%. This larger sales decline in December means that the smaller downward revision to January sales results in the month/month January change being revised to a real gain of 0.03% from the earlier estimate of a -0.07% decline.

The real gain of less than 0.1% in January retail sales is the only monthly price-adjusted gain since last September. The nominal value of retail sales in January were up 4.00% yr/yr while consumer prices (CPI-U) rose 4.4%. That is, price-adjusted retail sales were down yr/yr in January.

Data on consumer prices for February will be released tomorrow by the BLS and are expected to show an increase of 0.3% for the month and 4.4% yr/yr. Nominal retail sales yr/yr to February rose only 2.6% suggesting that price-adjusted retail sales are down more than -1.0% yr/yr. This, even with household savings rates negative over the past three months for the first time since 1933.

Today’s report shows a broad decline in even the nominal sales receipts (except soaring costs for job-creating health care!) in most goods and services. Deeply indebted households, already forced to spend down current savings even as their homes’ value decline, now face a cut-back in real wages and paid hours together with a very tough job market and cut-throat global price competition from China and elsewhere.

Years of unprecedented debt-dependence and constant misinformation from all-powerful Wall Street interests may be starting to take their inevitably severe toll.