by Calculated Risk on 4/14/2008 09:56:00 AM

Retail sales were slightly higher in March due to increases in gasoline prices. Excluding gasoline stations, nominal sales were flat in March compared to February.

More importantly, in real terms - inflation adjusted - retail sales are now below the year ago level.

This graph shows the year-over-year change in nominal and real (inflation adjusted) retail sales since 1993.

Click on graph for larger image.

To calculate the real change, the monthly PCE price index from the BEA was used (March PCE prices were estimated).

Although the Census Bureau reported that nominal retail sales increased 2.1% year-over-year, real retail sales declined almost 1.1% (on a YoY basis).

This is a recessionary level for retail sales.

UPDATE: From the National Retail Federation: Tough Economy, Cooler Weather Blamed for March Retail Sales Decline

While consumers continue to battle high gas, energy and food prices, retailers reported a dip in March retail sales. According to the National Retail Federation, retail industry sales for March (which exclude automobiles, gas stations, and restaurants) dipped 0.9 percent unadjusted over last year and were down 0.3 percent from the prior month.

March retail sales released today by the U.S. Commerce Department show total retail sales (which include non-general merchandise categories such as autos, gasoline stations and restaurants) increased 0.2 percent seasonally adjusted from the previous month and increased 0.1 percent unadjusted year-over-year.

“Unseasonably cooler weather created a challenging sales environment for many apparel retailers last month,” said NRF Chief Economist Rosalind Wells. “With the earliest Easter in 95 years, the calendar shift will likely impact April sales as well. In order to get a true picture of retail performance, we will need to look at both March and April sales combined.”

Many retailers felt the brunt of the troubled economy as well. Clothing and clothing accessories stores sales decreased 0.5 percent seasonally adjusted from last month and 2.0 percent unadjusted year-over-year. Sales at electronics and appliance stores decreased 0.4 percent seasonally adjusted month-to-month and 1.0 percent unadjusted year-over-year.

Note that March sales were boosted by an early Easter, and that the NRF expects April sales to be negatively impacted by the calendar shift.