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Economy in Brief

U.S. Retail and Food Service Sales Strengthen during June; Core Sales Firm
by Tom Moeller  July 16, 2020

• Consumer spending continues to strengthen.

• Discretionary spending growth remains firm.

Total retail sales, including food service establishments, increased 7.5% during June following a record 18.2% May increase, revised from 17.7%. A 5.2% rise had been expected in the Action Economics Forecast Survey. Retail sales excluding motor vehicles & parts improved 7.3% following a 12.1% gain, revised from 12.4%. A 5.3% rise had been anticipated. In the retail control group, (which excludes autos, gas stations, building materials & food services), sales rose 5.6% (6.3% y/y) after strengthening 10.1% in May.

Retail sales excluding restaurants improved 6.4% last month on the heels of a 17.1% rise. Sales of motor vehicle & parts dealerships rose 8.2% following a 48.7% increase. Unit sales of motor vehicles rose 8.1% in June. It followed a 40.5% May recovery which came after two months of double-digit decline. Gasoline & service station sales increased 15.3% (-19.1% y/y) as prices rose and stay-at-home restrictions eased.

Eating out remained on an upward trend as restaurant and drinking establishment sales jumped 20.0%. Combined with the 31.5% May rise, sales have fully recovered sharp declines in the prior two months. Nevertheless they remained one-quarter below the February level.

Ordering goods from home eased somewhat last month. Sales of nonstore retailers fell 2.4% after strong growth earlier in the year, and they remained up by roughly one-quarter y/y. General merchandise stores sales rose 2.7% (2.5% y/y) after a 5.9% rise. Department store sales increased 19.8% (-10.6% y/y) after gaining 36.2% in May. Building materials & garden store sales eased 0.3% (+17.3% y/y) after strengthening 12.2% in May.

Apparel & accessory store sales strengthened 105.1% in June (-23.2% y/y) after recovering 176.7% in May. These gains followed sharp declines in the prior two months. Furniture & home furnishing store sales rose roughly one-third (-3.5% y/y) following a 79.1% jump. Electronics & appliance store sales rose 37.4% (-12.7% y/y) after a 36.5% May recovery from three straight months of decline. Sporting goods, hobby, book & music store sales improved 26.5% (20.6% y/y) after a 78.0% rise.

Grocery & beverage store sales weakened 1.2% (+12.4% y/y) following a 2.2% May rise. In another nondiscretionary category, health & personal care products sales rose 3.5% in June (-5.7% y/y) after improving 1.5%.

The retail sales data can be found in Haver's USECON database. The Action Economics forecast is in the AS1REPNA database.

Retail Spending (% chg) Jun May Apr Jun Y/Y 2019 2018 2017
Total Retail Sales & Food Services 7.5 18.2 -14.7 1.1 3.5 4.4 4.7
  Excluding Autos 7.3 12.1 -15.2 -0.5 3.5 5.2 5.0
Retail Sales 6.4 17.1 -12.7 5.0 3.4 4.2 4.6
 Retail Less Autos 5.9 10.2 -12.8 4.3 3.3 5.1 4.9
  Motor Vehicle & Parts 8.2 48.7 -12.2 7.5 3.8 1.4 3.4
  Food & Beverage Stores -1.2 2.2 -12.9 12.4 2.5 2.9 4.1
  Gasoline Service Stations 15.3 11.9 -24.5 -19.1 -0.6 9.3 9.4
Food Service & Drinking Places 20.0 31.5 -34.3 -26.3 4.6 5.8 5.7
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