June Retail Sales Rise Minimally, But Showcase Resiliency
Reuters reports U.S. retail sales rose less than expected in June, increasing 0.2 percent month-over-month, the Commerce Department said on Tuesday. Data for May was revised higher to show sales gaining 0.5 percent instead of 0.3 percent as previously reported. Economists polled by Reuters had forecast retail sales gaining 0.5 percent. Excluding automobiles, gasoline, building materials and food services, retail sales increased 0.6 percent in June.
Clothing store sales increased 0.6 percent in June, while online sales surged 1.9 percent. Receipts at furniture stores increased 1.4 percent, and electronics and appliance store sales advanced 1.1 percent. Auto dealership sales rose only 0.3 percent. However, receipts at building material and garden equipment supplies dealers dropped 1.2 percent. Consumers also cut back spending on sporting goods, hobbies, books and musical instruments. Grocery store sales fell as did receipts at department stores. Sales at services stations dropped 1.4 percent, reflecting lower gasoline prices. Sales at food services and drinking places edged up 0.1 percent after rising 1.2 percent in May.
Total Retail's Take: Even marginal sales growth in June shows that spending has remained resilient. Consumers' purchasing power is gradually improving as inflation subsides. "June’s 0.2 percent gain in retail sales reflects positive momentum on inflation. Consumer concern about inflation hit its lowest point since Morning Consult began tracking last year: 47 percent of Americans said they’re very concerned about inflation vs. 64 percent a year ago," said Morning Consult's retail and e-commerce analyst Claire Tassin.
David Silverman, senior director at Fitch Ratings, commented: "Another monthly sales report, another demonstration of consumer spending resiliency. Fitch expects this theme of flattish or even negative volume growth to continue, with effective cost and inventory management key to effective retail management."
Consumers have remained resilient despite many economists expecting the end of the student loan moratorium and tightening credit conditions to weigh on spending in the second half of the year, according to Yahoo Finance. June's numbers should be fairly encouraging to retailers, indicating that the U.S. economy remains resilient even as consumers become more thoughtful with their purchases.
Kristina Stidham is the digital content director at Total Retail and sister brands Women in Retail Leadership Circle and Women Leading Travel & Hospitality at NAPCO Media. She is passionate about digital media and handles video, podcast and virtual event production for all brands. You can often find her at WIRLC, TR, WLT&H or industry events with her camera and podcasting equipment—or at home on Zoom—recording interviews with thought leaders and business executives.
Kristina holds a B.A. in Media Studies and Production from the Temple University Klein College of Media and Communication in Philadelphia. Go Owls! When she's not in the office, she loves to go on long walks, sing around the house, hangout with her family and two pet guinea pigs, and travel to new places.