Economy
15 September 2022
Retail sales rebound in August, rising 9.1% to outpace inflation
Ecommerce sales dipped in the month after Prime Day, US Commerce Department data indicates.

Ecommerce sales dipped in the month after Prime Day, US Commerce Department data indicates.
US retail sales rose in August after falling in July, demonstrating continued evidence that consumers are still spending in the face of stubborn inflation.
Retail sales totaled $683.3 billion in August, which was an increase of 0.3% over July, according to the US Commerce Department. When compared with August 2021, sales grew 9.1%.
At the same time, the Commerce Department revised down its estimate for July from unchanged to a month-over-month decline of 0.4%. That means the rebound in August was even bigger.
US retail sales August 2021-August 2022 (Courtesy of FRED/US Census)
The retail sales released each month by the federal government are not adjusted for inflation, so the year-over-year rise in spending is likely linked in part to the same goods costing more than they did a year ago. Earlier this week, the August reading of the Consumer Price Index showed the inflation rate at 8.3%. So the growth in retail sales still outpaced the rise in prices.
While there has been some month-to-month variation, retail sales have continued to remain resilient during this year’s bout with 40-year-high inflation. However, this trend is also a sign that demand is not falling despite the Fed instituting back-to-back rate hikes of 0.75% that are designed to cool off the economy and bring inflation down.
Ecommerce sales show up in this macro measure in the category of nonstore sales. These sales fell 0.7% month-over-month after the Prime Day month of July, while growing 11.2% year-over-year.
US retail sales: Nonstore retailers. (1994-2022)
A major driver of the uptick in overall retail sales was the motor vehicle and auto parts category, which was the biggest mover in August with an increase of 2.8% month-over-month and a 6.7% year-over-year increase.
Food services and drinking places also posted notable growth, increasing 1.1% month-over-month and 10.9% year-over-year.
Gas station sales fell 4.2% month-over-month, reflecting the continued dip in gas prices.
Miscellaneous store retailers, which include office, secondhand and furniture stores, grew 1.6% month-over-month and 15.3% year-over-year.
A National Retail Federation measure of retail sales that excludes auto dealers, gas stations and restaurants to focus on core categories showed that retail sales were up 0.1%.
“Household spending remains steady even as costs continue to rise,” NRF Chief Economist Jack Kleinhenz said, in a statement. “Consumers continuing to spend more each month points to the benefits of strong job and wage growth and their use of pandemic savings to help handle persistent elevated prices. Consumers are showing their toughness, but they have limited options and cannot continue if prices do not begin to soften. This retail sales report comes amid mixed signals from the broader economy that show the headwinds against the consumer are strengthening.”
Those mixed signals continued to bear out in other data released this week.
The job market continues to show signs of resilience, despite rate hikes from the Federal Reserve that were expected to result in softening. Weekly jobless claims fell for the fifth straight week to 213,000, according to the US Labor Department. That’s down 5,000 from the 218,000 claims the week prior, which itself was revised downward. It was the lowest level for this metric since May 28.
Weekly jobless claims: Oct. 2021-August 2022. (Source: FRED: US DOL)
Meanwhile, there are upstream signs that inflation was easing. The Producer Price Index, which measures wholesale prices of goods before they reach retail, fell 0.1% for the month in August, despite rising 8.7% year-over-year, the Labor Department reported on Wednesday. It was the second straight month of decline after a 0.4% decline in July and a 1% increase in June.
In this measure, decreasing energy prices are having a bigger impact than they are in the Consumer Price Index, where falling gas prices were offset by rising food, housing and medical costs. Three-quarters of the decline in this month’s increase was the result of a 12.7% decrease in gas prices. Backing out food and energy costs, the index showed wholesale prices rose 0.2%.
This week's data is among the latest that the Federal Reserve will consider when it meets next week to determine whether and by how much to raise interest rates as it seeks to bring down inflation.
Ecommerce is on track for another trillion-dollar year, US Commerce Department data shows.
US ecommerce sales showed growth to start the year, and gained share of total retail.
The US Department of Commerce reported the following:
Ecommerce sales for the first quarter of 2023 were $272.6 billion, adjusted for seasonal variation.
That’s an increase of 3% from the fourth quarter of 2022.
On an annual basis, ecommerce sales increased 7.8% from the first quarter of 2022.
That’s well above the growth rate of overall retail sales, which were up 3.4% year-over-year.
In all, ecommerce sales in the first quarter accounted for 15.1% of total retail sales.
(Source: US Department of Commerce)
Quick takeaways:
A fast start: Retail sales crossed the $1 trillion mark for the first time in 2022. That momentum is continuing into 2023, as the $272 billion total for the first quarter provides a big head start in once again topping the 12-figure threshold.
Gaining share: While ecommerce’s share of retail spiked north of 16% during the pandemic years, it came back to the 14% range in 2022. The start of 2023 shows that more steady growth is continuing to settle in. It shows that ecommerce is still making gains despite the return to stores, albeit on a more gradual trajectory.
Choosing ecommerce: While retail sales overall are showing more tepid growth to start the year, the data indicates that online shopping continues to be an attractive option. It likely helps that online prices have been falling while overall inflation is continuing to push prices up across the economy. Retailers also have more robust infrastructure for fulfillment and delivery following massive buildouts in the pandemic, particularly at grocers and mass retailers. This combination of price and convenience is proving to lift sales, even as we move squarely into a period when ecommerce is a choice rather than a health and safety necessity.