Retail sales for the month of July increased by 0.7% month-over-month from June, resulting in a stronger-than-expected showing, according to data from the commerce department Tuesday. The jump indicated that consumer spending has held up for now as inflation continues to slow.
The advanced retail sales report also showed a sales increase of 3.2% above July 2022. Total sales for the May 2023 through July 2023 period were up 2.3% from the same period a year ago.
Apart from overall retail sales, food and beverage stores in particular (including grocery, beer, wine, and liquor stores), rose 3.5% as compared to last year (July 2022). Pharmacies and drug stores increased 8.1% compared to last year, and general merchandise stores (including warehouse clubs and supercenters) rose 3.2% in the same timeframe.
Retail trade sales were up 0.6% from June 2023 and up 2% above last year. In addition, non-store retailers were up 10.3% from last year, while food services and drinking places were up 11.9% from July 2022.
The advanced retail sales report was better than the 0.4% Dow Jones estimate, according to reporting from CNBC. Excluding autos, sales rose 1% (also against a 0.4% forecast). Both results were the best monthly gains since January.
Other key findings from the sales report included:
- The consumer price index rose 0.2% on the month
- July’s numbers were boosted by a 1.9% jump in spending at online retailers
- Sporting goods and related stores increased 1.5%
- Foodservice and drinking places rose 1.4%
However, segments including furniture, electronics, and appliance stores reported a drop in sales, whereas gas station sales rose just 0.4% for the month despite rising prices.
In addition, shoppers have shown a willingness to use credit cards with their balances exceeding $1 trillion for the first time in the second quarter of 2023, CNBC reports.
The good news is that July’s data showed that spending was widespread, with most categories showing increases.
“Consumers spent with vigor in July, perhaps with a sense of relief that inflation is fading even in the absence of recession or extensive job losses,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors. “Is a soft landing still on the table? It’s certainly possible, but it seems a stretch to conclude that it’s probable.”
