Brave and Karger, What Was in Your Holiday CARTS? Resuming Our Index Tracking National Retail Spending (2024-01)

Summary

This Chicago Fed Insights article introduces version 2.0 of the Chicago Fed Advance Retail Trade Summary (CARTS), a weekly index benchmarked to the Census Bureau's retail and food services sales excluding motor vehicles and parts, after CARTS 1.0 production was suspended in early 2022 following the loss of data from several data providers. CARTS 2.0 combines eight weekly series, adding card data from the BEA and SafeGraph, foot traffic data from Advan and receipt data from Numerator to the Consumer Edge and Facteus card data, Morning Consult sentiment and EIA gasoline sales. It also carries a Weekly Index of Retail Prices to deflate sales, and the Federal Reserve Bank of Chicago says it will resume publishing CARTS twice a month beginning in February 2024.

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In this Chicago Fed Insights article, we unveil version 2.0 of our Chicago Fed Advance Retail Trade Summary
 ( CARTS ) and
 provide a preview of what it signals for retail spending during the 2023 holiday season in the United States.

The Chicago Fed Advance Retail Trade
 Summary debuted in mid-2021. A summary measure of multiple high-frequency
 indicators for consumer spending (including payment card transactions, retail foot traffic, gas sales, and
 consumer
 sentiment), CARTS grew out of pandemic-era research that aimed to improve on
 the timeliness and reliability of
 traditional measures of retail spending in the U.S. To achieve this end, it introduced a new weekly index that
 was
 benchmarked to the U.S. Census Bureau’s measure of retail & food services sales excluding motor
 vehicles & parts
 (ex. auto), allowing for a direct comparison with the latest Monthly Retail Trade Survey (MRTS) and a
 nowcast
 of the
 next release of the Advance Monthly Retail Trade Survey (MARTS).

CARTS 1.0 came to an end in early 2022, when production was suspended after the loss of data from several data
 providers. In this Chicago Fed Insights article, we unveil the new and improved CARTS 2.0 and use it to
 preview
 retail
 spending for the 2023 holiday season.

CARTS 2.0

We expand upon the base provided by CARTS 1.0 to include a broader set of alternative consumer spending
 indicators.
 The eight weekly times series 1 included in CARTS 2.0 are each
 seasonally adjusted 2 —and, in some cases, merged or
 transformed with other data sources—to provide a complete history extending from January 2018 through the
 present. 3

In addition to the payment card data CARTS originally used from the firms Consumer Edge and Facteus ,
 we now include
 the card data that the U.S. Bureau of Economic Analysis ( BEA ) publishes and similar data
 from SafeGraph .
 Replacing
 the retail foot traffic data formerly from SafeGraph is a new series constructed instead from data provided by
 SafeGraph’s partner Advan .
 Finally, to better cover the space of noncard transactions, we introduce into CARTS 2.0 a
 new data source from the company Numerator that tracks U.S. retail
 spending
 from detailed receipt-level data.
 Finally, we add our previously included weekly measures of consumer sentiment from Morning Consult and gasoline
 sales from the U.S. Energy Information Administration ( EIA ).

The key feature of CARTS is its ability to combine these eight weekly data series with the U.S. Census
 Bureau’s
 monthly data on retail & food services sales ex. auto in a time-consistent fashion. The result is a Weekly
 Index of
 Retail Trade that is designed to match, when aggregated to a monthly frequency, the available Census Bureau
 data,
 and to provide an initial estimate of these data ahead of each month’s release from the Census Bureau.

The Census Bureau data are measured in nominal terms, meaning that they are not adjusted for changes over time in
 the
 prices of retail goods and services. To account for this fact and arrive at a measure of real consumer spending,
 CARTS also contains a weekly estimate of the price deflator used by the BEA to convert retail sales into an
 inflation-adjusted spending measure. This Weekly Index of Retail Prices is constructed much like its sales
 counterpart, matching, when aggregated, the BEA’s monthly chain-weighted price index whenever it is
 observed and
 providing an early estimate of it ahead of each new release.

Informing our weekly estimate of retail prices are measures of online prices from State Street PriceStats (weekly)
 and Adobe (monthly) and weekly gas
 prices from the EIA. The addition of the Adobe Digital Price Index and EIA
 gasoline prices to the CARTS 2.0 model used to estimate the Weekly Index of Retail Prices helps to provide a
 timelier indication of changes in retail prices and, as a result, a more reliable measure of inflation-adjusted
 retail sales in CARTS.

Latest results

Beginning in February 2024, the Federal Reserve Bank of Chicago will resume providing the Chicago Fed Advance
 Retail
 Trade Summary twice a month: 1) a day ahead of the U.S. Census Bureau’s MARTS release summarizing data
 through the
 end of the prior month and 2) at the end of each month summarizing data available through mid-month. A
 preliminary
 release schedule is available
 online . As we work to continue to improve our technical infrastructure for CARTS,
 additional release dates may be added.

As a preview of what information will be provided once CARTS is relaunched, we summarize below the CARTS 2.0 preliminary results for December 2023.

Notes

1 We use a regularized weekly calendar that runs from days 1–7,
 8–14,
 15–21, and 22 to the end of each month. The varying number of days in the fourth week of each month is
 then
 corrected for during seasonal adjustment.

2 Our seasonal adjustment procedure incorporates the U.S. Census
 Bureau’s
 monthly seasonal factors and allows as well for seasonal variation at the weekly frequency driven by retail
 holidays
 in the U.S. and other seasonal factors. All of this takes place jointly in the R programming language using the Prophet package developed by
 Facebook’s data
 scientists.

3 For instance, we use the history of nonstore payment card
 transactions
 from the company Womply that was part of CARTS 1.0 to backfill and obtain an initial level for nonstore credit
 &
 debit card transactions from the U.S. Bureau of Economic Analysis (BEA).

Opinions expressed in this article are those of the author(s) and do not necessarily reflect
 the views of the Federal Reserve Bank of Chicago or the Federal Reserve System.

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