August 24, 2014

Retail sales unchanged in July

Aug. 14, 2014 – July's retail-sales growth was the weakest in six months as tepid wage growth and lower demand for vehicles restrained consumer activity, according to data published by the Census Bureau.

Total retail sales were relatively unchanged in July compared to the previous month, NAFCU Senior Economist Curt Long noted in a NAFCU Macro Data Flash report. But, he said, improvements are expected in coming months.

"Retail sales have gradually tapered off since a strong showing this spring," Long said. "Economic indicators have been mixed lately, as solid reports on job growth and consumer confidence have thus far failed to translate into stronger home and retail sales."

Core retail sales – excluding light vehicles and gasoline – increased 0.1 percent in July while retail sales of auto and gas decreased 0.1 percent for the month.

Results among the major retail segments were mixed in July. Clothing and accessories stores led the way with 0.4 percent growth, followed by food and beverage stores (0.3 percent). Sales dropped most severely for general merchandise stores (-0.5 percent) and motor vehicle and part stores (-0.2 percent).

Year-over-year sales growth slowed to 3.8 percent in July, Long noted. The June number was revised to 4.2 percent growth.

"Record-high stock prices, rising home values and continuing improvements in the labor market should allow consumers to release some of their pent-up demand," Long said. "Retail sales are expected to grow as the rest of the economy continues to improve throughout the year."