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Economy in Brief

U.S. Retail Sales Are Surprisingly Strong in June
by Tom Moeller  July 16, 2021

• Increase accompanies lifting of COVID-19 restrictions.

• Spending overall held back by lower auto sales.

• Outside of auto sector, sales gains are broad-based.

Total retail sales including food service and drinking establishments increased 0.6% (18.0% y/y) during June following a 1.7% May decline, revised from -1.3%. A 0.5% June weakening had been expected in the Action Economics Forecast Survey. April's 0.9% sales increase was unrevised. Sales excluding motor vehicles and parts increased 1.3% (17.6% y/y) last month after falling 0.9% in May, revised from -0.7%. A 0.3% June rise had been expected.

Sales in the retail control group, which excludes autos, gas stations, building materials and food services, increased 1.1% (12.5% y/y) in June after falling 1.4% in May, revised from -0.7%.

Motor vehicle purchases declined 2.0% (+19.5% y/y), adding to May's 4.6% fall, revised from -3.7%. The shortfall compares to a 10.3% drop (+16.3% y/y) in unit sales of light vehicles. Spending at electronics & appliance stores improved 3.3% (+37.3% y/y) after falling 5.5% during May. Sales at clothing & accessory stores rose 2.6% in June (47.1% y/y) after rising 2.2% in May. Sales of general merchandise stores rose 1.9% (10.5% y/y) following two straight months of sharp decline. Within that group, department store sales strengthened 5.9% (24.4% y/y) after a 1.9% May increase. Nonstore retail sales rose 1.2% (12.0% y/y) and made up half of May's 2.3% weakening. To the downside were sales of furniture & home furnishing stores which fell 3.6% in June (+17.1% y/y) following May's 2.3% drop. Sporting goods, hobby and book store sales fell 1.7% (+10.2% y/y), roughly as they have for three straight months.

Building materials sales were off 1.6% in June (+6.8% y/y), the fourth sharp decline in the last five months. Gasoline service station sales rose 2.5% (37.1% y/y) after edging 0.2% higher in May. The gain reflected a 6.3% rise in gasoline prices (seasonally adjusted by Haver).

In the nondiscretionary sales categories, grocery & beverage store sales improved 0.6% last month (3.0% y/y) after rising 1.0% in May. Health & personal care store sales rose 1.6% (13.8% y/y) after a 1.2% May decline.

As restrictions on eating out were lifted, sales at restaurants & drinking establishments strengthened 2.3% (40.2% y/y) following a 3.7% May rise, revised from 1.8%. It was the fifth month of strong increase in the last six.

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 2020 2019 2018
Total Retail Sales & Food Services 0.6 -1.7 0.9 18.0 0.3 3.3 4.4
  Excluding Autos 1.3 -0.9 -0.1 17.6 0.3 3.4 5.1
Retail Sales 0.3 -2.4 0.4 15.6 3.1 3.0 4.2
 Retail Less Autos 1.1 -1.6 -0.8 14.5 4.0 3.0 5.0
  Motor Vehicle & Parts -2.0 -4.6 4.4 19.5 0.3 2.9 1.4
  Food & Beverage Stores  0.6 1.0 0.7 3.0 11.5 3.1 2.9
  Gasoline Service Stations 2.5 0.2 -1.4 37.1 -15.7 -1.7 9.2
Food Service & Drinking Places 2.3 3.7 5.1 40.2 -19.4 5.6 5.7
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