After heating up in July, retail sales slipped back slightly in August. Here is the retail sales index excluding the Motor Trades since January 2010.
One feature in the August figures is the difference in the performance of the value and volume series. The volume series is down about 0.2% on the month but the value series is down 1.4%. The CPI was flat in August with monthly prices decreases for some categories that feed into the RSI such as food (-0.6%), alcohol (-0.6%), medical products (-0.9%), furniture (-0.3%).
These changes mean that the volume of retail sales is up 1.3% on last year, while the value index is down 0.2%. This augurs well for the contribution retail sales make to real GDP (around half of the final consumption expenditure component of GDP is reflected in the Retail Sales Index) but the prospects for nominal GDP remain muted. The link between nominal GDP and deficit targets was addressed in a previous post.
The recent volatility in the monthly changes is evident from the following chart.Tweet