United States retail sales were down sequentially and up annually in July, according to data issued today by the United States Department of Commerce’s Census Bureau.
Total July retail sales, at $763.6 billion were down 0.6%, from June to July, and rose 5.0% annually, Commerce reported. And it added that, from May through July, total sales increased 6.3% compared to the same period a year ago. July marks the 10th consecutive month of annual retail sales gains.
Non-store retail sales, which includes e-commerce, rose 10.2% annually on a year-to-date basis, and general merchandise sales rose 3.3%, for the same period.
Commerce’s data was in line with the new edition of the CNBC/NRF Retail Monitor, powered by Affinity Solutions, which was recently released. Data for this report is based on actual anonymized credit and debit card purchase data from Affinity Solutions and does not need to be revised on a monthly or annual basis.
The CNBC/NRF Retail Monitor found that total July retail sales, excluding automobiles and gasoline stations, saw a 0.32% seasonally-adjusted, sequential gain, while heading up 5.15% annually on an unadjusted basis, compared to 0.33% sequential and 9.41% annual gains in June.
For core retail sales, which the Retail Monitor describes as retail sales, excluding restaurants in addition to auto dealers and gas stations, rose 0.3% sequentially and 4.72% annually, compared to 0.36% and 10.08% sequential and annual gains in June.
And it added that retail sales total sales are up 6.57% annually through July, with core retail sales up 6.53%.
“Retail sales maintained their steady upward momentum in July as consumers kept shopping despite ups and downs in other economic indicators,” NRF President and CEO Matthew Shay said. “Supported by a low unemployment rate and steady wage gains, households remained budget conscious but took full advantage of midsummer sales and early back-to-school promotions to stretch their dollars. Retailers helped balance budgets by remaining committed to affordability, ensuring that everyday products remain accessible for American families.”
Looking at individual retail sales segments, the CNBC/NRF Retail Monitor observed that July sales rose in nearly every category it tracks:
- Electronics and appliance stores were down 0.05% month over month seasonally adjusted but up 12.04% year over year unadjusted;
- Digital products (such as electronic books and games) were up 1.21% month over month seasonally adjusted and up 12.02% year over year unadjusted;
- Health and personal care stores were up 0.53% month over month seasonally adjusted and up 10.07% year over year unadjusted;
- General merchandise stores were up 0.47% month over month seasonally adjusted and up 8.3% year over year unadjusted;
- Clothing and accessories stores were up 0.51% month over month seasonally adjusted and up 6.55% year over year unadjusted;
- Grocery and beverage stores were up 0.46% month over month seasonally adjusted and up 4.52% year over year unadjusted;
- Furniture and home furnishings stores were down 0.04% month over month seasonally adjusted but up 2.71% year over year unadjusted;
- Building and garden supply stores were down 0.17% month over month seasonally adjusted and down 1.2% year over year unadjusted; and
- Sporting goods, hobby, music and book stores were down 0.47% month over month seasonally adjusted and down 3.01% year over year unadjusted
NRF Vice President of Supply Chain and Customs Policy Jonathan Gold told LM in a recent interview that with retail sales showing relatively steady growth, it runs counter to softer consumer sentiment.
“Consumers continue to spend on retail goods,” he said. “Obviously, the tax refunds in March exceeded last year’s refunds by over $20 billion spurring spending across discretionary and essential goods despite rising gas prices. Inflation remains elevated as tariffs and gas prices weigh on the cost of goods. Despite headwinds, consumers still are still out there spending.”
In a research note, Neil Saunders, Managing Director of GlobalData, observed that July marked another robust month for U.S. retail, despite inflation continuing to run hot across most of the retail sector.
“There is a legitimate question as to how such strong growth is being produced at a time when Americans feel relatively gloomy about the economy and are still broadly dissatisfied about the cost of living,” wrote Saunders. “Some of this, of course, is funded by a modest increase in debt—which see mostly come through in increased credit card balances. Unreported financial mechanisms, like buy-now-pay-later, are also seeing sharp rises. However, some is also being funded by a modest rise in real disposable income which a lot of consumers seem to be directing straight into spending rather than saving. Indeed, the savings ratio has fallen again in recent months. This may seem contradictory when set against a more cautious mindset but, from our research we also see an increasing attitude of throwing caution to the wind.
These dynamics suggest that while the levels of increase may not be sustained over the balance of this year and into next year, they are not entirely based on shaky foundations. It will likely take a more general and wider economic shock—which still cannot be discounted—to blow the consumer firmly off course.”
