Monthly Retail Sales and Inventories, United States, 1992-2022

Monthly Retail Sales and Inventories United States 1992 2022

Source: United States Census Bureau. Monthly & Annual Retail Trade.
Note: Excludes motor vehicles and parts.

Retailing is a core commercial activity that reflects the level of economic activity and factors linked to income. It has a pronounced seasonality underlining a cyclical behavior with peak and through periods. The above chart underlines three aspects of this cyclical behavior in the United States (as well as in most developed economies); the long-term trend (decades), the cycles of growth and recession (6 to 8 years), and seasonality (annual).

  • Retail sales. Retail sales have steadily been increasing, more than doubling over the 1992-2013 period. A recessionary period between 2001 and 2003 is evident, with sales below the long-term trend. The 2005 to 2008 period is indicative of higher growth rates, with retail sales above the trend. The financial crisis of 2009 (also labeled the Great Recession) resulted in retail sales for the 2009 to 2011 period well below the trend. Retail sales have a clear annual cycle that begins with the January and February low sales period that gradually increases to reach the May and August higher sales months (summer and school purchases, respectively). Sales then decrease in September to gradually increase in October and November, particularly after thanksgiving. December is the most active month of the year, with a significant retail sales surge, which is clearly associated with the holiday season. The Covid-19 pandemic had substantial impacts on retail sales, with an initial decline, followed by a surge due to deferred demand and stimulus policies.
  • End of month retail inventories. Represents the value of all the commercial goods held at stores or distribution centers monthly. It is considered a leading indicator since inventory accumulation usually precedes sales. Retailers are stocking up in October and November (peak inventory accumulation period) in anticipation of the December retail surge, which depletes inventories that reach an annual low point in December and January. During the Covid-19 pandemic, supply chain stresses were associated with a decline in inventory levels.
  • Ratio inventories/sales. The trend clearly underlines a long-term decline in the ratio as retailers are more active in implementing tighter inventory management strategies, which means the inventory levels are getting more similar to sales levels. Amplitude has also been declining, implying that retailers are better at synchronizing distribution, inventories, and sales.

Retail cycles have a close relation with port activity since many goods are imported from foreign manufacturers and distributors.