NRF: July Retail Sales Up, But Consumer Spending Could Slow

The National Retail Federation (NRF) today announced that retail sales — excluding automobile dealers, gasoline stations and restaurants — were up 0.9 percent in July, up 5.6 percent year-over-year, and the industry trade association remains cautiously optimistic about consumer spending as a whole for the rest of the year. The NRF said its numbers are based on data from the U.S. Census Bureau, which also announced today that July sales — including auto dealers, gas stations and restaurants — were up 3.4 percent year-over-year. Specifics from key retail sectors during July include the following.

• Online and other nonstore sales were up 19.3 percent year-over-year and up 2.8 percent month-over-month seasonally adjusted, likely boosted by Amazon.com's Prime Day promotion.
• Health and personal care stores were up 6.1 percent year-over-year, but down 0.2 percent month-over-month seasonally adjusted.
• Grocery and beverage stores were up 4 percent year-over-year and up 0.6 percent month-over-month seasonally adjusted.
• General merchandise stores were up 2.1 percent year-over-year and up 0.6 percent month-over-month seasonally adjusted.
• Furniture and home furnishings stores were up 2 percent year-over-year and up 0.3 percent month-over-month seasonally adjusted.
• Sporting goods stores were up 2 percent year-over-year, but down 1.1 percent month-over-month seasonally adjusted.
• Building materials and garden supply stores were down 0.5 percent year-over-year, but up 0.2 percent month-over-month seasonally adjusted.
• Clothing and clothing accessory stores were down 1.6 percent year-over-year, but up 0.8 percent month-over-month seasonally adjusted.
• Electronics and appliance stores were down 2.3 percent year-over-year, but up 0.9 percent month-over-month seasonally adjusted.

“July’s strong results are consistent with a confident consumer,” said NRF Chief Economist Jack Kleinhenz. “Households are in good shape with spending and that should continue as long as the labor market remains healthy. But it’s important to remember that today’s data is looking backward at what was happening a month ago. The impact of volatile financial markets and increased trade tensions in recent weeks may put a wind of caution in consumer spending as we move forward in 2019.”

Total Retail's Take: Indeed, the NRF is concerned about recent economic news. To wit: The release of July’s numbers comes two days after the Trump administration delayed new tariffs on some consumer goods until Dec. 15 to avoid any impact on holiday spending, but many products will still be hit by tariffs taking effect Sept. 1. In fact, the NRF put a statement out about the tariff issue earlier this week, saying that it's pleased the administration is delaying some tariffs ahead of the holiday season, but tempered its enthusiasm. "Uncertainty for U.S. businesses continues, and tariffs taking effect Sept. 1 will result in higher costs for American families and slow the U.S. economy. During this delay period, we urge the administration to develop an effective strategy to address China’s unfair trade practices by working with our allies instead of using unilateral tariffs that cost American jobs and hurt consumers.”