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United States Retail July 2023

United States: Retail sales growth picks up pace in July

Retail sales expanded 0.7% month-on-month in seasonally-adjusted terms in July (June: +0.3% mom). The result marked the best reading since January, and was far above market expectations of 0.4%. That said, Amazon Prime Day sales likely flattered the data somewhat. Looking at the details of the release, food and beverages, non-store retailers and gasoline station sales gained pace.

On an annual basis, retail sales grew 3.2% in July, which was significantly better than June’s 1.6% expansion and marked the best result since February.

July’s figures bode well for consumer spending in Q3, against a backdrop of a still-solid labor market, lower inflation than earlier in the year and optimistic household sentiment.

On the latest data and forecast implications, Goldman Sachs’ analysts said:

“Combining data from the latest retail sales and CPI reports, we estimate that real core retail sales increased 1.2% in July. While we assume Amazon Prime Day pulled forward some spending from August into July, we nonetheless boosted our Q3 GDP tracking estimate by seven tenths to +2.2% (qoq ar) and our domestic final sales growth forecast by eight tenths to +2.1%.”

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