Chart(s) for the Day: A Real Problem With The Economy?

WSJ: “Retail Sales Shrink. U.S. retail sales fell a seasonally adjusted 0.8% in January compared with a month earlier.”

As disappointing as that sounds at first glance, the underlying reality even more so. While higher prices have fueled nominal growth in recent years, real spending has stalled.

When adjusted for inflation, retail sales dropped to a three-year low in January. On a nominal basis sales are nearly 20% higher than January 2021 (even after last month’s 0.8% decline).

The earnings picture is not much brighter. On a real basis, weekly earnings are little changed from pre-COVID levels.