What are Retail Sales?

Retail Sales Definition. The Retail Sales report is published monthly by the U.S. Census Bureau, a division of the Commerce Department. The report measures the amount of consumer spending on all goods and services sold by retailers, including sales for both durable (those goods expected to last for more than three years) and non-durable goods. Key components are comprised of automobiles, building materials, furniture, department store sales, food stores, gasoline, clothing, restaurants and drugstores. The data is assembled on a survey basis of over 12,000 retail firms and is a good indicator of consumer spending behavior and its potential impact on growth in the economy. Consumer spending has a significant impact on our domestic economy since the level of spending is often associated with being 70% of our nation’s GDP. However, critics of this comparison claim that government healthcare expenditures are included in these consumer spending figures and that it is flawed since GDP is actually a measure of gross domestic production, not spending. A material portion of consumer spending is also for foreign produced goods, which may be helpful for corporate earnings or foreign economies, but have little effect on GDP growth. Nevertheless, consumer spending tends to lead our economy out of recessionary periods, based on prior recoveries. Many business leaders require a positive change in this metric before committing corporate assets to further production efforts.

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