Your Money Minute: "Retail Sales Higher Because Of Higher Prices"

Host: Jessica Ettinger, CNBC
Date: February 26, 2026
Episode Theme:
This brief episode explores the December holiday retail sales data, revealing that recent growth is driven not by consumers buying more goods, but by price inflation. CNBC’s Jessica Ettinger and economist Gregory Daco discuss how inflation impacts retail metrics and consumer behavior.

Key Points & Insights

1. Retail Sales Are Up… But Why?

• Headline Finding: Retail sales figures for December were higher, which initially sounds positive for the economy and retailers.

  • Jessica Ettinger [00:00]: “Retail sales were higher in the holiday month of December. That's great. But it turns out retailers didn't sell more things. It's just that the items they did sell cost you more.”

• Driving Force: The increase was entirely due to higher prices (inflation), rather than consumers purchasing more items.

  • Jessica Ettinger [00:30]: “Inflation, it turns out, is what pushed the retail sales number for December higher.”

2. No Real Volume Growth, Just Price Increases

• Expert Analysis: Gregory Daco of EY-Parthenon offers data:

  • Gregory Daco [00:22]: “If you look at retail sales, they're trending at about a 2 1/2% clip. You adjust for the inflation. We're not seeing any volume growth.”
  • Translation: After considering inflation, the quantity of goods sold hasn’t increased—only the dollar amount due to higher prices.

• Further Clarification:

  • Gregory Daco [00:40]: “So essentially all of this is on the price front. The real retail sales volume growth is actually slightly down. So that tells me that we're still seeing sales progress, but it's largely coming from the price side of the picture.”

3. Consumer Behavior in a High-Cost Environment

• Consumer Sensitivity: Most shoppers are now more careful with their spending as prices rise.
  • Gregory Daco [00:40]: “…any consumer that is quite sensitive, which is the majority of consumers, are being much more judicious with their outlays. In this high cost environment.”

4. Resources for Listeners

• Actionable Tip:
  • Jessica Ettinger [01:03]: “You can learn a lot more about inflation and how it impacts your wallet. @cnbc.com”

Notable Quotes

• Jessica Ettinger [00:00]: “Retail sales were higher in the holiday month of December. That's great. But it turns out retailers didn't sell more things. It's just that the items they did sell cost you more.”
• Gregory Daco [00:22]: “If you look at retail sales, they're trending at about a 2 1/2% clip. You adjust for the inflation. We're not seeing any volume growth.”
• Gregory Daco [00:40]: “The real retail sales volume growth is actually slightly down… any consumer that is quite sensitive, which is the majority of consumers, are being much more judicious with their outlays.”

Timestamps for Key Segments

• 00:00–00:22: Jessica Ettinger opens with the headline—that retail sales appear up, but it’s due to higher prices, not greater quantity.
• 00:22–00:30: Gregory Daco explains why, after adjusting for inflation, there’s no volume increase.
• 00:30–00:40: Ettinger confirms inflation as the driver behind retail sales figures.
• 00:40–01:03: Daco breaks down the reality: Price inflation, not spending growth, explains the numbers; consumers are reacting with caution.
• 01:03: Ettinger encourages listeners to learn more at CNBC.com.

Tone and Style

• Informative and clear, focusing on demystifying financial headlines in practical, everyday terms.
• Relatable and direct, staying focused on actionable takeaways for consumers.

Summary Takeaway

While December’s retail sales headline sounds positive, the data shows growth is exclusively due to higher prices, not more stuff being bought. Most consumers are spending cautiously amid rising costs. For practical insights on inflation’s impact on your wallet, CNBC has further resources.

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