Retail
Sales Perk Up in July
Americans spent more on new cars, clothing
and eating out in July, pushing U.S. retail and food services sales up by 0.6%
over the month. Additionally, the decline of 0.3% originally posted in June was
revised up to a flat reading – an indication that the consumer sector is not as
bad off as the initial weak June numbers seemed to suggest. Core retail sales,
which strip out autos, gasoline and building supply centers were up by
0.3%.
Sales were stronger across the board last
month. Among the major sectors reporting an increase in sales were motor
vehicles (1.4%); furniture and home furnishings (0.8%); home improvement
centers (0.7%); health and personal care stores (0.3%); gasoline stations
(0.4%); and apparel retailers (0.4%). U.S. consumers also spent more on
sporting goods, books, music and their hobbies (0.9%), they ate out more (0.7%)
and spent more on online shopping (1.5%), thanks in no small part to Amazon’s
“Prime Day” on July 15.
The only two sectors posting a decline in
sales were the long struggling electronic and appliance stores (-1.2%) and
general merchandize stores (-0.5%). Sales at food and beverage stores were
unchanged over the month.
On a year-over-year basis, total retail
sales in July were up by 2.4%, which is still below the average growth rate of
3.0% over the last 12 months. Most major sectors are reporting year-over-year
gains with the exception of electronics and appliance stores (-2.5%),
department stores (-2.7%) and gasoline stations (-15.2%), primarily because of
declining prices (retail sales are not adjusted for prices changes). The
biggest winners over the year have been restaurants and bars (9.0%), motor
vehicles (6.9%) and the catch-all category sporting goods, hobby, book and
music stores (6.4%).
This was a good report and should partially
help ease concerns over the health of U.S. consumers and their willingness to
spend. Americans remain cautious in their spending habits and since the end of
the recession, an uptick in spending is usually accompanied by a decline in the
saving rate. If recent gains in labor market continue, and if stronger wages are
realized, it will help support consumer demand and retail spending through the
end of this year.
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