United States: Retail sales growth slows in June
Retail sales expanded 0.2% month-on-month in seasonally-adjusted terms in June (May: +0.5% mom). The reading undershot market expectations, although this was partly due to a notable upward revision to May’s expansion. Looking at the details of the release, motor vehicle and parts dealers sales slowed in June, and food and beverages sales swung to contraction. In contrast, non-store retailers sales accelerated, while gasoline stations sales declined at a softer pace than in the prior month.
On an annual basis, retail sales increased 1.5% in June, which was below May’s 2.0% expansion. Meanwhile, annual average retail sales growth fell to 5.8% in June (May: +6.4%).
Looking at Q2 as a whole, retail sales expanded in all three months of the quarter. This, together with growth in overall consumer spending (covering both goods and services) in April and May points to a solid private consumption outturn in Q2.
On the reading, TD Economics’ Shernette McLeod said:
“With June’s retail spending in the bag, we expect consumer expenditure to come in lower than the 4.2% posted in Q1. Despite the expected deceleration from Q1, taken in context, consumer spending is still commendable given the current headwinds facing consumers.”