July retail sales were up 0.4 percent seasonally adjusted from June and increased 4.9 percent unadjusted year-over-year, giving the industry a solid kickoff for the third quarter as consumers continued to spend despite concerns about the growing trade war, the National Retail Federation said yesterday. The numbers exclude automobiles, gasoline stations and restaurants.
“Today’s numbers mirror the economy, which is in very good shape,” NRF Chief Economist Jack Kleinhenz said, citing consumer confidence, a strengthening labor market and more after-tax dollars in household wallets thanks to tax reform. “Consumer fundamentals remain healthy and continue to provide wherewithal for consumers to drive domestic economic growth.”
“Consumer spending is the backbone of the current economic expansion but the fly in the ointment is uncertainty regarding tariffs,” Kleinhenz said. “If they escalate, they will no doubt weigh on confidence and household spending.”
The bad news is sporting goods stores were down 5.7 percent year-over-year and down 1.7 percent month-over-month seasonally adjusted, but clothing and clothing accessory stores were up 5.4 percent year-over-year and up 1.3 percent month-over-month seasonally adjusted. Online and other non-store sales were up 11.3 percent year-over-year and up 0.8 percent month-over-month seasonally adjusted.
The three-month moving average was up 5 percent over the same period a year ago. The numbers come two days after NRF revised its annual forecast, saying 2018 retail sales are now expected to grow at least 4.5 percent over 2017 rather than the 3.8 percent to 4.4 percent predicted earlier this year.
The July results build on improvement seen in June, which was down 0.1 percent monthly from May but up 3.9 percent year-over-year.
NRF’s numbers are based on data from the U.S. Census Bureau, which said overall July sales – including automobiles, gasoline and restaurants – were up 0.5 percent seasonally adjusted from June and up 6.4 percent year-over-year.
