US & World Economies US Economy GDP Growth & Recessions US Retail Sales Statistics and Trends Retail sales were down in December By Kimberly Amadeo Updated on January 18, 2023 Reviewed by Michael J Boyle Reviewed by Michael J Boyle Michael Boyle is an experienced financial professional with more than 10 years working with financial planning, derivatives, equities, fixed income, project management, and analytics. learn about our financial review board Fact checked by Ariana Chávez In This Article View All In This Article What Retail Sales Mean for You How Is Retail Sales Report Data Collected and Used? Frequently Asked Questions (FAQs) Photo: Vetta / Getty Images By the Numbers U.S. retail and food service sales were down 1.1% from November to December.However, retail sales were up year-over-year by 6%.Retail sales numbers are not adjusted for price changes, so inflation decreasing could be impacting the results. However, some economists think it consumers could finally be slowing their spending amid persistent inflation. Retail sales can give policymakers and other interested observers an opportunity to see how the economy is performing, at least in terms of consumer spending Every month the Census Bureau releases the Advanced Monthly Sales for Retail and Food Services estimate for the month before. The bureau also releases an estimate for the month before, and the data is collected quarterly. Retail sales are a key indicator of the health of the economy. Learn more about the estimate, its importance, and the latest reported figures. What Retail Sales Mean for You As an important measure of economic activity, retail sales are watched closely by investors, policymakers, and businesses. Rising retail sales often show a growing economy, while declining sales indicate a contracting economy. By keeping an eye on this report, you can gauge where the economy may be headed, and what that may mean for your household finances. How Is Retail Sales Report Data Collected and Used? The Census Bureau report measures the U.S. retail industry each month by surveying around 5,500 employer firms to collect retail sales data. It shows the total sales and the percentage change for that month and reports on the percentage change in year-over-year (YOY) sales for the last 12 months. Note The retail sales report includes cars and parts, furniture and furnishings, electronics and appliances, department stores, food and drink, restaurants, sporting goods and hobbies, health care items, clothing and accessories, gas stations, and building and garden supplies. Retail Sales Indicate Trends Retail sales signal trends in consumer spending, which drive almost 70% of economic growth. Consumer spending is part of a country's gross domestic product (GDP), which is used as a general indicator of how an economy is doing. Since the retail sales report comes out monthly, it is a more current measurement of economic health than GDP, which is reported quarterly. You can use the retail sales report to gauge the economy if you use it in context with other issued reports and economic conditions. If reports and conditions accompany a continuous monthly increase in retail sales, there is a good chance that the economy will continue growing. Retail Sales Are Included in Other Reports The information included in the retail sales report is used to create the personal consumption expenditures index, which is the measure of inflation that the Federal Reserve uses to set monetary policy. Personal consumption expenditures include purchases of durable and nondurable goods. It also includes services like housing, health care, retail, transportation, education, and many others. To gain a measurement of spending (by consumers) to production (by the entire country), economists divide personal consumption expenditures over a period by gross domestic product for the same period. This tells them how much of GDP growth (or shrinkage) consumer spending makes up. Note About 20% of annual retail sales occur during the holiday season. GDP is an annualized number. GDP growth compares this annualized figure to the prior year. Keep in mind that GDP growth uses real GDP figures, which eliminates the effects of inflation. The YOY retail sales reports use nominal GDP figures, which do not adjust for inflation. GDP growth reports and YOY retail reports could have significant differences if inflation is very high or if there is deflation. Retail Sales Are Tracked by Investors and Businesses Investors and businesses also use the retail sales report as an economic indicator to monitor the business cycle. Several economic indicators are used in conjunction to see where in the business cycle the economy is or where it might be headed. The report can help them create strategies for dealing with downswings or taking advantage of upswings. Other Retail Reports The National Retail Federation (NRF) surveys shoppers to find out how much they plan to spend on the major holidays. For instance, the report on Halloween spending provides early clues for the holiday shopping season. The NRF also reports on retail sales for Valentine's Day, Mother's Day, Father's Day, and Back to School. Frequently Asked Questions (FAQs) What is retail sales? Retail sales is an important monthly economic indicator. The Census Bureau collects monthly sales data from thousands of retail and food service establishments and compiles the information into 13 broad categories. Investors and others keep an eye on retail sales because consumer spending comprises around 70% of gross domestic product. What percent of retail sales are online? The Census Bureau collects and reports on online retail sales on a quarterly basis. For Q2 2022, online retail made up 14.5% of total retail sales for the quarter. Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. Census Bureau. "Advance Monthly Sales for Retail and Food Services." Census Bureau. "Monthly Retail Trade: FAQs." Census Bureau. "Advance Monthly Sales for Retail and Food Services," Page 2. Federal Reserve Bank of St. Louis. "Personal Consumption Expenditures/Gross Domestic Product." Bureau of Economic Analysis. "NIPA Handbook: Concepts and Methods of the U.S. National Income and Product Accounts." Page 5-5. National Retail Federation. "Retail Holiday and Seasonal Trends." Census Bureau. "Quarterly E-Commerce Sales."