NRF: Retail Sales Increased in June, Despite Rising Inflation
Retail sales increased in June even as inflation climbed higher and drove up prices across the board, the National Retail Federation (NRF) said last week. NRF’s calculation of retail sales, which is based on Census numbers but excludes automobile dealers, gasoline stations and restaurants, reported that June was up 0.6 percent from May and up 5.8 percent year-over-year.
“June’s numbers show consumers are powering through price pressures, but inflation is eating away at savings built up during the pandemic and is wiping out recent income gains,” said Jack Kleinhenz, chief economist, NRF, in a statement. “Inflation remains a challenge to consumers trying to make ends meet and will continue to be an issue even if it cools down in the months ahead. Despite that, consumers are holding up notably well and continuing to spend.”
June sales were up in all but two retail categories on a yearly basis, the NRF said, led by online sales, grocery stores and building materials stores, and increased in just over half of the categories on a monthly basis. Online and other non-store sales, for example, were up 2.2 percent from the previous month, while grocery and beverage stores also recorded a 0.4 percent growth in sales. Sales at clothing and clothing accessory stores declined 0.4 percent from May, and sales of general merchandise stores fell 0.2 percent month-over-month.
Total Retail's Take: While the NRF's June retail sales data shows that consumers are still spending, the group pointed out that consumers are still modifying their spending behavior and that the economy and consumer spending won't improve unless drastic measures are taken. Furthermore, with inflation driving up prices, it's legitimate to question whether the increase in overall sales is a reflection of increased prices, and not incremental spending.
“Inflation has consumers modifying their spending behavior and prioritizing essentials like food, energy and back-to-school items," said Matthew Shay, NRF CEO and president. "Unfortunately, modified consumer behavior won’t be sufficient to offset persistent price increases. Other policy measures like removing China tariffs, enacting smart immigration reforms, and investing in supply chain resiliency are needed to lower costs for American families and put much-needed dollars back into their pockets.”