Retail sales report.

In plain English

The report surveys retailers and reports total sales in dollars, broken out by category, along with revisions to the two prior months. Because it is reported in dollars and not adjusted for inflation, a rise can reflect higher prices rather than more goods sold. Analysts often watch a control group that excludes autos, gasoline, building materials, and food services, since those categories swing on price and are volatile. That control measure feeds into estimates of consumer spending in the national accounts. Consumer spending is the largest component of the economy, so this report carries weight.

01Why it matters

Consumer spending drives most of the economy, so a sustained slowdown here tends to show up in hiring and in company earnings within a couple of quarters.

02The math, step by step

Say retail sales rise 0.4 percent in a month while consumer prices rise 0.3 percent. Real sales rose about 0.1 percent. Almost the entire headline gain came from higher prices, not from people buying more.

Illustrative example. The amounts here are hypothetical, chosen to show how the math works, not real quoted rates or figures.

03What this is NOT

04Receipts

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