U.S. Retail Sales Flat in July as Consumers See Relief From Gas Prices
Retail sales in the U.S. were stagnant in July according to the latest Census Bureau numbers, which analysts say is an indication of inflation's impact on consumer spending. A collective $682.8 billion was spent in July, relatively unchanged from the previous month.
The national average gasoline price dropped to about $4.27 per gallon in the last week of July, according to AAA. That's after gas prices hit an all-time high of just above $5 in mid-June. By Wednesday, AAA said the national average was at $3.94 a gallon.
"Americans have had to trade down or delay purchases as inflation continues to squeeze household budgets, and that's apparent in today's 0.0-percent month-over-month change in retail sales," said Claire Tassin, Morning Consult's retail and e-commerce analyst, in an email Wednesday.
Several retail categories saw slight increases in spending in July, including health and personal care stores, electronics and appliance stores, and furniture and home furnishings stores. Auto sales decreased 1.6 percent, according the Commerce Department report.
Total Retail's Take: It appears consumers are seeing relief at the gas pump and buying goods with that extra money. The fact that retail sales haven't dipped by any significant amount — in fact, they were up around 10 percent from 2021 — is good news for those worried about a coming recession.
“Retail sales were up considerably compared with a year ago even though consumers are more discerning in this economic environment,” NRF Chief Economist Jack Kleinhenz said in a press release published by the trade association. “Consumer spending was an encouraging signal as the economy kicked off the third quarter. Nonetheless, inflation is still disturbingly high even as it eases and is the most important challenge for consumers and retailers. The future path of inflation remains a key factor for the economy and monetary policy as the Federal Reserve works to bring price increases under control.”