Skip to main content

Understanding January Retail Sales Numbers

February 19, 2021

Despite what you may see in the headlines, January retail sales numbers bring good news! Catch our newest TrendsTalk episode with ITR President and Speaker Alan Beaulieu to learn more.


Follow Us

SoundCloud   •  Spotify  •   iTunes   •   YouTube

← Back to list of episodes.

Transcript by Rev

Hello, I'm Alan Beaulieu from ITR Economics. It's a pleasure to talk to you today. I say it's a pleasure because I think we have terrific news to go through today. Just today, the January retail sales numbers came out and the headlines, once again, don't agree with our view of reality. I guess, there's only one reality. Theirs isn't using a seasonally adjusted number, and they said, January retail sales went up 5.3% and on they went from there. Well, the reality is that on a non seasonally adjusted basis, which means there's no adjusting of the data, the numbers are what they are. When you look at January retail sales, it declined from December, but the decline was really impressive, and that the decline was 1.93%. And what we actually have here is the mildest January decline since World War II. How great is that?

And the article went on to say, that's the impact of the stimulus checks. And I thought to myself, "Oh, you know, that's not wrong." The December text came out and some of those would be spent in January because the December retail sales numbers weren't nearly what the media said about how there was a stumble and how the economy was perhaps facing recession. That wasn't right. So I thought of it and I thought, "Well, you know what? Yeah, stimulus checks. Sure. Let's give that $600 it's due," I said to myself. But there's more, there's much more. And what was going on behind that, was jobs. That doesn't get talked about too often, so let's you and I talk about jobs for a minute.

Jobs increased in number and wages went up in January. When we look at the employment rate for service industry production, service employees, which means that we're talking accountants and lawyers and doctors, and we're talking about office clerks. We're talking about all of that. Wages went up in January and the average was $32.90. And that's just off the record, the highest in 36 plus years of November, and it normally declines off of the November period. It's nothing a sinister or untoward or meaningful about that. The number of people that work, that's where we saw a very average decline. We saw the decline in employment into January and we thought, "The media is not going to like that," but you shouldn't hear that number and go, "Well, that's just normal." And by golly, normal is good. Because normal means you can get work. Wages going up mean you have pressure. It means that there are things going on that you have to get ready for. Now, the average annual wage in this country is in the private sector is $54,000 plus. Just shy of a record high on a three month moving total basis.

And again, it's normal to see a little easing in the end of the year or early part of the year. $54.269,000 on a three month moving total basis is going to be more upside pressure to come. '21 is going to push up wages. Yes, we need more people making money. It means more people making money, making more money, will be spending it on our retail sales. So they'll be spending it on a whole lot of things, including restaurants. Restaurant sales are moving up. Now they suffered for a couple of months at the end of the year because of the rollbacks and the partial shutdowns and outside eating only for a few weeks and all of that. But what we know for a fact by looking at the trends is that retail sales in restaurants will be moving up.

So with cases coming down, COVID deaths coming down, vaccines rolling out, restaurants, hospitality, will be seeing some upward movement. You'll be finding yourself in a more positive environment as you go forward. You're going to find that the retail sales number stays strong, employment numbers continue to improve, wages continue to go up, inflation stays pretty mild. Right now in January, it's at 1.4% for the consumer price index on an urban basis. You're going to find yourself in a spot where your major concerns are going to be, "Am I ready?" Not if there's demand, am I ready for the demand? And you're going to be asking yourself, "How can I raise prices later on this year?" If you're dealing with commodity price pressures, which there are a number of them out there. Well, here's the answer.

As those commodity price pressures build, it's going to be in the media more and more. As it's in the media more and more, you're going to use that for cover. You're going to use that as passing along small price increases to your customers. And as everybody in marketing will tell you, small price increases, numerous of them over a period of time are much better than one large price increase. So you're going to do that. And '21 is going to allow you to do that. You're going to have your continued labor problems this year. You're going to find yourself challenged to meet the demand this year. But if you wait until you're positive about that, you're going to find that your problems are a whole lot worse. So I'm encouraging you to be ready. If you've been holding back, if you've been unsure because of the stock market our optimizer indicators for the stock market are saying, "Don't hold back." If you want to know more about the optimizer, send me an email, Alan@ITR If you want to know more about the leading indicators, you go to our website.

So all of them are gloriously positive. What I know about the world economy, the leading indicators are good. If you want to know about how you fit into it all, you can find out for free through data casts on our website. There's lots of ways that you can know what's going on. My thrust here today is to let you know that the retail sales data in January, good news. Employment numbers, good news. Wage growth, good news. And if you're looking for good news, I can't think of anything better than to let you know the consumer is strong, businesses are spending and there's even more money coming. There are longterm problems associated with all that stimulus money, but for right now, check the box. Good news, be ready and deal with the debt problem as a future problem, that has nothing to do with '21 and it has nothing to do with '22. You're going to like what's going to happen. Thank you very much. I hope you have a good one.


Since 1948, we have provided business leaders with economic information, insight, analysis, and strategy. ITR Economics is the oldest privately held, continuously operating economic research and consulting firm in the US. With a knowledge base that spans six decades, we have an uncommon understanding of long-term economic trends as well as best practices ahead of changing market conditions. Our reputation is built on accurate, independent, and objective analysis.