Retail sales show slight growth in July, according to NRF and Commerce
August 13, 2013
As has been the case over the last four months, retail sales have shown growth albeit not at startling rates. That was the case again for July retail sales in data released by the United States Department of Commerce and the National Retail Federation today.
Commerce reported that July retail sales at $424.5 billion were up 0.5 percent compared to June and up 4.0 percent compared to July 2012. Total retail sales from May through July are up 4.0 percent annually.
The NRF reported that July retail sales, which exclude autos, gas stations, and restaurants, increased 0.3 percent on a seasonally-adjusted basis from June and were up 5.0 percent on an unadjusted basis annually. NRF officials said that July was mixed for retailers as back-to-school-related items showed solid growth, while home-based categories showed declines.
“Spending has stalled and the economy is stuck in neutral,” NRF Chief Economist Jack Kleinhenz said in a statement. “Even with modest employment gains and steady consumer confidence, Americans remain in a cautiously-positive spending pattern. While clothing and sporting goods retailers saw modest gains with early back-to-school shopping, home-based retailers saw marked decreases, possibly indicating the end of the year-long housing boom. This month’s retail sales report will make any decision on tapering that much harder for policymakers in D.C.”
As previously reported, with retail sales growth modest at best, there still remains a mixed bag of signals and headwinds on the economic front, including a slightly declining unemployment rate, improving consumer confidence data, as well as encouraging automotive sales and housing data.
These things continue to occur, though, against the backdrop of sluggish GDP growth and general uncertainty regarding the economy.
The continuing trend of slight or flattish sequential retail sales increases remains largely intact due to fairly even retail spending at a time when retailers remain cautious on the inventory planning side and postponing commitments until the economic outlook becomes clearer, while they are risking stock outages by having very lean inventories.
“Consumers continued to spend through the first quarter despite onerous tax increases,” wrote Sterne Agee chief economist, Lindsey M. Piegza in a research note. “But by the second quarter, while consumers were still spending, momentum had slowed. Many will argue at this point it is clear the burden of higher taxes and spending cuts have run their course. But the effects of tax increases often take time to filter into consumers’ long-run spending patterns, and with government furloughs taking effect coupled with modest employment gains and minimal income growth, there is plenty of cause for caution. While positive, this morning’s retail sales report was far from robust, and not yet enough to eradicate fears of a consumer slowdown undermining growth in the second half of the year.”
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