Americans picked up their spending at retail stores in July, even as inflation accelerated for the first time in more than a year.
Retail sales, a measure of how much consumers spent on a number of everyday goods, including cars, food and gasoline, rose just 0.7% in July, the Commerce Department said Tuesday. That is above both the 0.4% increase projected by Refinitiv economists and the 0.2% gain recorded in June.
Excluding the more volatile measurements of gasoline and autos, sales climbed 1% last month.
The figures are not adjusted for inflation.
SILVER LINING OF HIGHER INTEREST RATES: SAVINGS ACCOUNT RATES
Consumers spent more on items like food, clothing and building and garden materials. They also continued to open their wallets when online shopping, with spending at non-store retailers jumping 1.9% from the previous month, and at sporting goods, musical instrument and book stores, which saw sales climb 1.5%.
STUDENT LOAN REPAYMENTS COULD SLAM BIG-NAME RETAILERS THIS FALL
|DOW JONES AVERAGES
|NASDAQ COMPOSITE INDEX
“Amazon Prime Day in mid-July likely boosted overall spending last month,” said Jeffrey Roach, chief economist at LPL Financial.
Sales rose in nine of 13 retail categories last month.
At the same time, Americans pulled back on spending in areas like furniture and home furnishing stores; electronics and appliance stores; and auto dealers.
A solid job market and big wage increases have helped to buoy consumer spending in recent months, despite record-high inflation. However, many economists expect consumers to grow more cautious in coming months as student loan payments resume and high interest rates continue to work their way through the economy.
“It seems that excess savings buoyed retail activity in recent months, but consumers are quickly depleting those excess reserves and starting to use credit to support spending habits,” Roach said.
Read the full article here