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Retail sales rise in June, face potential restraints
Total retail sales rose 0.5 percent in June – the fifth consecutive month of growth – led by auto dealers and gas stations, said NAFCU Research Assistant Yun Cohen. Although the growth outlook remains positive, Cohen highlighted factors that could restrain future growth.
"[T]he recent Supreme Court decision enabling states to require certain online retailers to collect sales taxes could affect online sales in the future," Cohen said in a NAFCU Macro Data Flash report. "Overall, consumer spending saw robust growth during the second quarter, supported by a strong labor market and stimulative tax cuts. Sales growth is expected to remain healthy in the second half of the year, though higher interest rates and uncertain trade policies pose downside risks."
According to data published by the Census Bureau, May's sales growth was revised up from 0.8 percent to 1.3 percent, while April's growth was revised down from 0.4 percent to 0.3 percent.
Core retail sales (excluding light vehicles and gasoline) increased 0.3 percent in June; auto and gas sales improved 0.9 percent during the month. Cohen noted that auto dealers saw higher unit sales, while gas sales were driven up by inflation.
Results among the major retail segments were mixed in June. Pharmacies reported a sales increase of 2.2 percent, followed by restaurants (+1.5 percent), nonstore retailers (+1.3 percent), gas stations (+1 percent) and auto dealers (+0.9 percent). Sales at sporting goods and hobby stores decreased 3.2 percent, followed by apparel stores (-2.5 percent) and department stores (-0.8 percent).