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Economy in Brief

U.S. Retail Sales Rise for the Fifth Time in Six Months in June
by Winnie Tapasanun  July 15, 2022

• June +1.0%, slightly higher than expected; May revised up to -0.1%.

• Ex-auto sales rise for six consecutive months.

• Auto sales rebound 0.8%; May revised up to -3.0%.

• Sales gain in most categories except for sales in building materials & garden equipt. stores, clothing & accessory stores, and general merchandise stores.

• Despite four-decade-high inflation and falling real incomes, consumers continue spending; restaurant & drinking place sales rise for five straight months.

Total retail sales rose 1.0% m/m (8.4% y/y) in June after a 0.1% downtick (-0.3% initially) in May and a 0.7% gain in April, according to the Census Bureau. The June rise was the fifth m/m gain in six months. The Action Economics Forecast Survey had expected a 0.8% m/m rise for June.

Excluding motor vehicles & parts, retail sales rose 1.0% (10.6% y/y), the sixth straight m/m rise, on top of a 0.6% gain (+0.5% initially). A 0.6% increase had been expected. Sales of motor vehicles & parts grew 0.8% (-0.0% y/y) following a 3.0% decline (-3.5% initially).

Sales in the retail control group, which excludes autos, gas stations, building materials & food services, increased 0.8% (6.8% y/y) in June, the fifth m/m rise in six months, after being virtually unchanged in May. These sales are used in the construction of personal consumption expenditures in NIPA accounts. Nonauto sales excluding gasoline & building materials rose 0.8% (5.3% y/y) following a 0.3% May decline and four straight m/m rises.

Sales by category mostly gained in June. Gasoline station sales rose 3.6% (49.1% y/y) due mostly to higher prices after a 5.6% May rebound, registering the fourth m/m rise in five months. Nonstore retail sales gained 2.2% (9.6% y/y), reversing a 1.0% decrease. Furniture & home furnishing store sales recovered 1.4% (4.6% y/y) following a 0.6% decline. Sporting goods store sales grew 0.8% (2.7% y/y), the fifth successive m/m advance, after a 0.4% increase. Electronics & appliance store sales rebounded 0.4% (-9.1% y/y), the fifth m/m gain in six months, after a 1.6% drop. Building materials & garden equipment store sales, however, slid 0.9% (+6.4% y/y), the third straight monthly fall, after a 0.2% easing. Clothing & accessory store sales fell 0.4% (-0.2% y/y) on top of a 1.1% decline. General merchandise store sales eased 0.2% (+1.5% y/y) vs. a 0.2% rebound.

In the nondiscretionary sales categories, food & beverage store sales rose 0.4% (7.1% y/y) in June after a 1.0% increase in May. Health & personal care store sales dipped 0.1% (-0.6% y/y) following a 0.8% May decline and two consecutive m/m increases.

Consumers continue to eat out despite high inflation and lower real incomes. Restaurant & drinking place sales rose 1.0% (13.4% y/y) in June after a 0.9% increase in May, registering the fifth straight monthly gain.

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

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