July 2017 Retail Sales

Retail sales were strong in July 2017 according to the Census Bureau.  Month-over-month, this important indicator jumped 0.6 percent.  Compared to a year earlier, transactions increased 4.2 percent.   Not only did the second half of the year get off to quick start, June’s tally was revised upward substantially; first reported as falling 0.2 percent, a more complete count indicates sales actually increased 0.3 percent in June, making July’s uptick even more impressive. 

Positive signs were nearly ubiquitous throughout the report as 10 of the 13 major categories gained in the period.  Motor vehicle sales and spending at home improvement stores each jumped 1.2 percent.  Non-store retailers brought in 1.3 percent more revenue in the period and beat last year’s July tally by 11.5 percent.  However, a few categories kept the positive signs from reaching unanimity; electronics & appliance stores declined 0.5 percent, clothing sales fell 0.2 percent and receipts at gasoline stations dropped 0.4 percent.  Despite these few spoilsports, a cyclically sensitive category gained strength. 

Atlas’ favorite category improved in the period.  Revenues for food & drinking places increased 0.3 percent.  Like many other lines in the Census Bureau’s report, June’s iteration was also upwardly revised, increasing to 0.3 percent from minus 0.6 percent in the initial release.  With the addition of July’s increase, this category is now at its highest level ever.  Atlas watches this segment closely for signs of weakening consumer confidence because it represents very discretionary spending which can be easily substituted for meals and beverages at home, no signs of that happening yet. 

From the vantage point of retail sales, consumers in America are doing well.  They are confident enough to increase their spending, thus propelling the nation’s output even further.  Retail sales suggest the economy got off to a good start in the third-quarter and that America’s current expansion is sure footed.