Economy Watch: Retail Sales Enjoy Healthy Gain

Consumers appear to be in a buying mood this summer, as last month's sales jumped 4.2 percent ahead of July 2016, the Census Bureau reported.
Image courtesy of Flickr Creative Commons user southareapictures

U.S. retail and food services sales came in at $478.9 billion in July, an increase of 0.6 percent compared with the previous month, and 4.2 percent ahead of July 2016 sales, the Census Bureau reported on Tuesday.  Also, the May-to-June change was revised from 0.2 percent down to 0.3 percent up. Consumers seem to be in a buying mood this summer, whether they’re patronizing their local stores or ordering from their smartphones. 

The Census Bureau adjusts for seasonal variation and holiday and trading-day differences, but not for price changes. Considering the current low rate of inflation (1.7 percent), that’s not an especially important factor, except for volatile commodities like gasoline. Sales at gas stations dropped only 0.4 percent in July, which is less movement than usual.

Car sales were strong in July, gaining 1.2 percent for the month and 5.7 percent for the year. Another winner was the miscellaneous category; dollar stores, for instance, enjoyed a month-over-month uptick of 1.8 percent, and an annual increase of 2.9 percent.

Department stores managed a 1 percent monthly sales increase, which is unusual for that ailing retail sector;  year-over-year, their sales dropped 1.3 percent. Electronics store sales lost ground, slipping 0.5 percent for the month and 0.9 percent for the year, as online purchases took a bite. As for all Internet sales, they continued their customary upward trajectory in July: 1.3 percent for the month and 11.5 percent for the year.