Despite a decline in auto sales, July retail sales edged up 0.2 percent, indicating that consumer spending may contribute to increased economic growth in coming months.
Core retail sales, which exclude auto, gas and building supply categories, increased 0.5 percent, the largest gain since December.
“Consumers continue to grind forward in July, marking 13 consecutive months of retail sales gains,” National Retail Federation President and CEO Matthew Shay said. “However, consumers alone can’t be expected to shoulder the burden of the economy. Fiscal and monetary policy uncertainties combined with stagnant economic and employment conditions continue to breed a volatile market with extreme swings in consumer spending. The economy can’t seem to maintain any amount of momentum. We just can’t seem to pull ourselves up.”
Building material and garden equipment and supplies sales fell 0.4 percent but increased 9.8 percent year-over-year. Electronics and appliance sales fell 0.1 percent month-to-month, and furniture and home furnishing sales decreased by 1.4 percent.
Sales at general merchandise stores rose 0.4 percent month-to-month, and health and personal care sales rose 0.7 percent. Clothing and clothing accessory sales edged up 0.1 percent month-to-month, and sales in sporting goods, hobbies, books and music rose by one percent.
“Spending has stalled and the economy is stuck in neutral,” NRF Chief Economist Jack Kleinhenz said. “Even with modest employment gains and steady consumer confidence, Americans remain in a cautiously-positive spending pattern. While clothing and sporting goods retailers saw modest gains with early back-to-school shopping, home-based retailers saw marked decreases, possibly indicating the end of the year-long housing boom. This month’s retail sales report will make any decision on tapering that much harder for policymakers in D.C.”