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Economy in Brief

U.S. Retail Sales Decline Sharply in July
by Tom Moeller  August 17, 2021

• Falloff is second in three months.

• Auto sales weaken for third straight month.

• Sales declines outside of autos are widespread.

Total retail sales including food service and drinking establishments fell 1.1% (+15.8% y/y) during July following a 0.7% June gain, revised from 0.6%. A 0.3% July weakening had been expected in the Action Economics Forecast Survey. May's 1.4% sales decline was revised from -1.7%. Sales excluding motor vehicles and parts weakened 0.4% (+15.8% y/y) last month after rising 1.6% in June, revised from 1.3%. A 0.2% July gain had been expected.

Sales in the retail control group, which excludes autos, gas stations, building materials and food services, fell 1.0% in July (+10.2% y/y) after rising 1.4% during June, revised from 1.1%.

Motor vehicle purchases declined 3.9% (+15.7% y/y) after falling 2.2% in June, revised from -2.0%. The weakening compares to a 4.5% drop (+0.3% y/y) in unit sales of light vehicles. Nonstore retail sales declined 3.1% in July (+5.9% y/y) after nudging 0.2% higher in June. Apparel store spending fell 2.6% last month (+43.4% y/y) following two straight monthly increases of roughly 3.7%. Sporting goods, hobby and book store sales fell 1.9% in July (+13.8% y/y) about the same as during each of the prior three months. Furniture & home furnishing sales weakened 0.6% in July (15.6% y/y) after two straight monthly declines of roughly 2.2%. Sales of general merchandise stores eased 0.1% (+10.9% y/y) following a 1.7% rise. Within that group, department store sales slipped 0.3% (+24.3% y/y) after June's 5.7% jump. To the upside were purchases at electronics & appliance stores which improved 0.3% in July (23.6% y/y) after a 4.5% June increase.

Building materials & garden equipment sales were off 1.2% last month (+7.5% y/y), the fifth sharp decline in the last six months. Gasoline service station sales rose 2.4% (37.5% y/y), strong for the third straight month. The gain reflected a 1.7% rise in gasoline prices (seasonally adjusted by Haver).

In the nondiscretionary sales categories, grocery & beverage store sales eased 0.7% last month (2.3% y/y) after rising 0.8% in June. Health & personal care store sales edged 0.1% higher (9.2% y/y) after a 4.5% June increase.

Sales at restaurants & drinking establishments continued to improve, rising 1.7% in July (38.4% y/y) following a 2.4% June gain. It was the fifth straight month of strong increase.

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 2020 2019 2018
Total Retail Sales & Food Services -1.1 0.7 -1.4 15.8 0.3 3.3 4.4
  Excluding Autos -0.4 1.6 -0.4 15.8 0.3 3.4 5.1
Retail Sales -1.5 0.5 -2.0 13.3 3.1 3.0 4.2
 Retail Less Autos -0.7 1.4 -1.2 12.6 4.0 3.0 5.0
  Motor Vehicle & Parts -3.9 -2.2 -4.6 15.7 0.3 2.9 1.4
  Food & Beverage Stores  -0.7 0.8 1.2 2.3 11.4 3.1 2.9
  Gasoline Service Stations 2.4 3.6 1.8 37.5 -15.8 -1.7 9.2
Food Service & Drinking Places 1.7 2.4 4.3 38.4 -19.5 5.6 5.7
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