Xander Snyder, senior commercial real estate economist for First American Financial Corporation, offers a different perspective on the recent U.S. Census Bureau’s “Advance Monthly Sales for Retail and Food Services” report. While the report showed a 2.5% increase in total sales from August 2022 to August 2023, Snyder points out that this growth is not adjusted for inflation and therefore may not accurately reflect consumer spending.
According to Snyder, adjusting retail sales growth for inflation reveals that real consumer spending actually declined by 1.2% in August compared to the previous year. This trend has been ongoing since February of 2023 and is reminiscent of the Great Financial Crisis in terms of prolonged annual decline.
Snyder cautions against making broad generalizations about all types of retail locations as each one may be impacted differently by changing consumer behavior and preferences. He also notes that experiential locations have fared better than non-experiential ones during this time.
It’s important to keep these factors in mind when analyzing retail sales data as they can provide a more accurate understanding of the current state of U.S.consumer spending.
