United States: Retail sales grind to a halt in July
August 12, 2016
Nominal retail sales recorded null growth in July compared to the previous month. The result undershot both the upwardly-revised 0.8% expansion in June (previously reported: +0.6% month-on-month) and the 0.4% rise the markets had expected.
The report from the Department of Commerce showed that the flat figure in July mainly reflected that a solid increase in motor vehicles and parts sales was offset by lower nominal gasoline station sales as fuel prices have declined. Meanwhile, the closely-watched core—or control group—retail sales, which excludes cars, gasoline and building materials, was also flat in July, though previous months’ figures have been revised upwards. The soft core retail sales result reflected modest declines across most key sub-categories, yet non-store retailers continued showing healthy growth.
On an annual basis, retail sales decelerated from a 3.0% increase in June to a 2.3% expansion in July. Sales at department stores declined further in July (-4.0% year-on-year), but sales at so-called non-store retailers—a proxy for e-commerce sales—continued to show strong growth (+14.1% yoy). This suggests that American consumers are increasingly opting to make purchases online.
Author: Ricardo Aceves, Senior Economist