One of the first pieces of data to come out each month is chain store sales. The coverage reports year over year comparisons of spending at the major retail chains. (Just three chains, Wal-Mart, Costco, and Target account for more than 80 percent of the chain stores sales included in the report.) The reporting is always expressed in nominal dollars. This can be misleading, since the same nominal increase will mean a smaller increase in real sales in a period of high inflation than low inflation. In the last year, the CPI index for commodities excluding food and energy rose by 0.6 percent. By contrast, the CPI for this category fell 0.8 percent in the year from July 2006 to July 2007. (This is not a perfect measure of inflation for these stores since it includes cars, which they do not sell, and excludes food and gas, which are sold in some chain stores.) Articles reporting on the growth in retail sales should make some effort to account for the effect of inflation.
--Dean Baker
