United States: Retail sales deteriorate in July
August 17, 2021
Retail sales fell 1.1% in month-on-month seasonally-adjusted terms in July, which contrasted June's 0.7% increase. The reading reflected a broad-based downturn across the major sectors, with motor vehicle and parts dealers, food and beverages and general merchandise stores all contracting in July.
On an annual basis, retail sales increased 15.8% in July, which was softer than June’s 18.7% expansion. Meanwhile, annual average retail sales growth rose to 14.3% in July (June: +13.2%). This signals an improving trend in the retail trade sector.
Commenting on July’s print, Francis Généreux, a senior economist at Desjardins, stated:
“The reduction in retail sales in July is disappointing, and real consumption growth may turn out to be weaker in the third quarter than the second. That said, the outlook is still good, thanks to tax relief for families, the job market’s strong performance and accumulated savings, which remain high. A less problematic supply, particularly in terms of motor vehicles, would also favor economic growth.”