Retail sales better than expected in June
U.S. retail sales remained unchanged in June, beating forecasts for a slight decline.
Overall retail sales in June were unchanged month-over-month in June but up 2.3% year-over-year, according to data released by the U.S. Census Bureau. Core retail sales (excludes automobile dealers, gas stations and restaurants) rose 0.9% in June and were 1.3% year-over-year. Analysts were expecting sales to fall 0.2%.
“June saw some acceleration in key discretionary categories like department stores, electronics and home improvement, supporting overall growth,” said David Silverman, senior director, Fitch Ratings. “These results support the view that while consumer health and spending on goods continues to moderate from pandemic era peaks, a material spending contraction seems unlikely in the near term.”
Core retail sales were up 3.2% year-over-year for the first six months of 2024, in line with NRF’s forecast for 2024 retail sales to grow between 2.5% and 3.5% over 2023.
"The path of household spending remains difficult to read,” said Jack Kleinhenz, chief economist, National Retail Federation. “Spending has been uneven but remains in good condition notwithstanding the slower pace of payrolls, subdued consumer confidence and price deflation for retail goods."
Looking ahead, Kleinhenz expects consumer spending trends to continue even though they will likely be tempered by softening of employment and income growth.
“Still-high interest rates are making purchases on credit more expensive and have discouraged new borrowing,” he added.
Last week, the CNBC/NRF Retail Monitor powered by Affinity Solutions reported that core retail sales (excluding restaurants, auto and gas) rose 0.3% month-over-month in June. Unlike survey-based numbers collected by the Census Bureau, the Retail Monitor uses actual, anonymized credit and debit card purchase data compiled by Affinity Solutions and does not need to be revised monthly or annually.
June sales were up in five out of nine retail categories on a yearly basis, led by online sales, general merchandise stores and clothing and accessory stores, according to the CNBC/NRF Retail Monitor, and up in four categories on a monthly basis.
