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Economy in Brief

U.S. Retail Sales Post Firm Increase in July
by Tom Moeller  August 14, 2020

• Consumer spending stays strong for third straight month.

• Auto sales decline holds back total.

The consumer continues to spend, following coronavirus shutdowns in the spring. Total retail sales, including food service establishments, increased 1.2% (2.7% y/y) during July following an 8.4% June rise, revised from 7.5%. A 1.8% gain had been expected in the Action Economics Forecast Survey. Retail sales excluding motor vehicles & parts improved 1.9% last month after strengthening 8.3% in June, revised from 7.3%. A 1.3% rise had been anticipated. In the retail control group, (which excludes autos, gas stations, building materials & food services), sales rose 1.4% (8.0% y/y) after improving 6.0% in June and 10.4% in May. Retail sales excluding restaurants improved 0.8% (5.8% y/y) after a 6.8% jump.

Sales of motor vehicle & parts dealerships eased 1.2% in July, in contrast to a 10.2% m/m rise in unit sales reported earlier this month. It followed a 9.1% June gain which came after a nearly one-half m/m May rise. Gasoline & service station sales improved 6.2% (-15.6% y/y), even though prices were fairly steady m/m.

Sales of nonstore retailers improved 0.7% (24.7% y/y) after a 2.1% decline. General merchandise stores sales eased 0.2% (+1.1% y/y) after strong growth in the earlier two months. Department store sales edged 0.1% higher (-13.4% y/y), also following two months of strong increase. Building materials & garden store sales declined 2.9% (+14.8% y/y) after improving 0.8% in June.

Apparel & accessory store sales strengthened 5.7% in July (-20.9% y/y) after surging 98.8% in June and 180.1% in May. Furniture & home furnishing store sales held steady (-0.7% y/y) following a 37.4% jump and surging 77.1% in May. Electronics & appliance store sales rose 22.9% (-2.8% y/y), the third straight month of double-digit improvement. Sporting goods, hobby, book & music store sales fell 5.0% (+17.8% y/y) after a 27.6% rise.

Grocery & beverage store sales improved 0.2% (11.1% y/y) following a 1.5% June decline. In another nondiscretionary category, health & personal care products sales strengthened 3.6% in July (3.2% y/y) after two months of strong increase.

Eating out remained in vogue as restaurant and drinking establishment sales rose 5.0% last month (18.9% y/y) after strengthening in each of the two prior months.

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

Retail Spending (% chg) Jul Jun May Jul Y/Y 2019 2018 2017
Total Retail Sales & Food Services 1.2 8.4 18.3 2.7 3.5 4.4 4.7
  Excluding Autos 1.9 8.3 12.3 1.9 3.5 5.2 5.0
Retail Sales 0.8 6.8 17.3 5.8 3.4 4.2 4.6
 Retail Less Autos 1.5 6.2 10.5 5.7 3.3 5.1 4.9
  Motor Vehicle & Parts -1.2 9.1 48.3 6.1 3.8 1.4 3.4
  Food & Beverage Stores 0.2 -1.5 2.2 11.1 2.5 2.9 4.1
  Gasoline Service Stations 6.2 14.8 12.0 -15.6 -0.6 9.3 9.4
Food Service & Drinking Places 5.0 26.7 31.3 -18.9 4.6 5.8 5.7
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