In the comments in this article, professor Michael Pettis states that "By the way please do not assume that retail sales growth rates are a good proxy for consumption growth rates."

I understand that consumption, is the C in Y=C+I+G+NX. However, I haven't seen a definition of retail sales growth (as it pertains to the U.S.) in any introductory economics textbooks. I imagine (somewhat loosely, that it's sales at Amazon, at malls, in restaurants etc.).

What are the primary differences between these two that are different (for say, the U.S. economy)?

  • $\begingroup$ Have you ever consumed anything (a service perhaps) that you did not buy in a retail store? $\endgroup$
    – Giskard
    Jun 19, 2021 at 9:31

1 Answer 1


First, it is hard to generalize because different statistical agencies might have different definitions of "retail sales". However, in the context of the US a widely used retail sales figures come from the U.S. Census Bureau Monthly Retail Trade dataset.

The data above focuses exclusively on retail stores and food stores, so it captures sales at outlets such as Wallmart, other stores you can see in a mall like furniture, toy stores, hardware stores etc, and gas stations. For full list of categories included you can follow this link to the current dataset which has breakdowns by all categories that they include. However, while they include a wide range of categories they still exclude a lot of final consumption which is accounted for in $C$ in national accounts.

In GDP the consumption includes all final consumption expenditure, this includes things like paying for rent, or imputed user cost of housing when you live in your own apartment, payments for all sort of goods and services that do not count as retail such as paying for financial advisors, some education services like tutoring private schools, medical care etc.


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