After plunging in December (slipping on the ice?) retail sales spiked upwards in January. Again we focus on the index that excludes motor trades. This is only 64% of the overall index for January as new car sales are at their highest during this month.
We can see that the big drops seen in December, particularly for the volume index, were largely recovered in January. The recent volatility (and cold weather) makes monthly comparisons difficult. This is reflected in the recent monthly changes.
The annual changes provide a much more steady comparison and we can see that retail sales continue to show a year-on-year decline. This decline is substantially lower than the rates seen in 2009 and it is notable that the rates of decline of the value and volume indices have converged.
This converging of the rates of change suggests that the effects of deflation on retail sales are being diminished.Tweet