There were several news stories on the 3.0 percent jump in retail sales the Commerce Department reported for January that took this as evidence that the economy was still very strong. In fact, since the January rise followed two months where reported sales fell sharply, the picture is far more ambiguous.

Reported sales fell by more than 1.0 percent in both November and December. As a result, reported sales in January were just 0.7 percent higher than those reported in October. Since these are nominal sales, it means that real retail sales have been close to flat over the last three months.

Likely, nominal sales did not really fall by more than 1.0 percent in November and December and then jumped by 3.0 percent in January. This is more likely an issue of seasonal adjustments for holiday shopping. Seasonal adjustments are always difficult, but post-pandemic shopping patterns make it harder for the Commerce Department to distinguish between sales changes reflected growth or weakness, as opposed to normal seasonal patterns.

In any case, when we get large changes like the 3.0 percent jump in sales reported in January, it is important to look back over the recent past to put them in context. No one looking at retail sales over the past three months can be concerned that they are growing too rapidly, even if the January jump, taken in isolation, might imply that.