Retail sales jump in July as consumers increased their spending
In some unexpected good news for the economy, retail sales bounced back in July and came in above estimates.
Overall retail sales in July were up 1% month-over-month and up 2.7% year-over-year, based on data released by the U.S. Census Bureau. That compared with a decrease of 0.2% month-over-month and an increase of 2% year-over-year in June.
Core retail sales (excludes automobile dealers, gasoline stations and restaurants) rose 0.4% from June to July and 5.2% year-over-year, based on the Census Bureau data. Core retail sales were up 3.4% year-over-year for the first seven months of the year.
The Census Bureau’s better-than-expected results came in as the nation’s largest retailer, Walmart, reported a strong second-quarter that included a 4.2% increase in comparative sales. Also, the Bureau of Labor Statistics reported on Wednesday that overall inflation was 2.9% in July, the first time inflation has dropped below 3% since 2021.
Sales rose across most categories in July, led by a 3.6% increase at motor vehicle and parts dealers. Sales at electronics and appliance stores rose 1.6%.
“July’s retail sale figures mirror the strength in the economy, which continues to expand even though there are pressures on growth,” said Jack Kleinhenz, chief economist, National Retail Federation. “The midsummer boost from back-to-school and college spending along with special deal days offered by retailers clearly helped. Households are proceeding with measured spending and getting the benefit of falling retail prices despite still-elevated prices for services. Even with growth of the labor force cooling, consumer spending remains the backbone of the economy and is keeping the expansion on a positive path.”
Last week, the CNBC/NRF Retail Monitor powered by Affinity Solutions, reported that core retail sales were up 0.95% month-over-month in July and up 1.69% year-over-year. That compared with increases of 0.3% month-over-month and 3.07% year-over-year 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.)
