Folks, I’m sipping my coffee and reading about the latest retail sales numbers, and let me tell you, it’s a mixed bag. Spending at US retailers last month was weaker than expected, which is a bit surprising given the World Cup and online sales events. I mean, you’d think people would be out buying jerseys and whatnot, but I guess not. Retail sales rose 0.2% in June from the prior month, which is down sharply from May’s revised 1% increase. That’s lower than expectations of a 0.3% increase, according to a poll of economists by data firm FactSet.
The Commerce Department said that retail sales are adjusted for seasonal swings but not inflation, which is worth noting. I’m no economist, but it seems like that could make a difference in the numbers. The World Cup and Amazon’s Prime Day sale did help boost spending last month, though lower gas prices weighed on the government’s retail figures. Excluding sales at gas stations, spending in June was up by a solid 0.7%, which isn’t bad.
A measure of retail spending that strips out volatile categories, such as sales of building materials and gasoline, rose 0.5% in June. That’s down from May’s 0.8%, but slightly higher than expectations of a 0.4% increase. This shows that underlying consumer demand continued to hum along last month, which is a good sign. Sales were up across most categories last month, rising the most among online retailers (1.9%) and car dealerships (1.9%). I guess people are still buying cars and stuff online, which is no surprise.
Retail spending declined the most at gas stations, plummeting 5.3%, and at health and personal care stores, which fell 0.8%. I’m not sure what to make of that, but maybe people are just not buying as much gas or health care products. Spending at restaurants and bars edged higher by just 0.1% last month, despite an influx of World Cup tourists. You’d think that would be a bigger boost, but I guess not. Sales at department stores were also up by only 0.1% in June, which is a bit disappointing.
Consumer spending, which accounts for about two-thirds of the US economy, has held up this year despite higher inflation and unusually weak consumer sentiment. That’s partly due to layoffs and a still-solid labor market, though low-income households are feeling the pain of price hikes and mounting debt more so than their high-income counterparts. Economists refer to that divergence as the K-shaped economy, which is a fancy way of saying that some people are doing okay while others are struggling.
In conclusion, the retail sales numbers are a bit of a mixed bag, but overall, it seems like consumer spending is still holding up despite some challenges. As I finish my coffee, I’m left thinking that the economy is still a bit of a mystery, but hey, at least people are still buying cars and stuff online. And who knows, maybe the World Cup will give the economy a boost in the coming months. We’ll just have to wait and see, I suppose.
Armchair patriot. Believes in the free market, cold beer, and that there’s always a guy named George behind every CNN segment.
Former remote-throwing champion turned #1 couch commentator on liberal panic in the media. Born in Texas (or so his mug says), he earned a degree in Fake Newsology & Beer Philosophy from YouTube University.
