July 2018 Retail Sales

Americans’ appetite for consumption continued growing in July 2018 according to data from the Census Bureau.  Retail sales improved 0.5 percent to start the second half of this year.  However, it should be noted that June’s tally was downwardly revised to just 0.2 percent from 0.5 percent.  Compared to a year earlier, this important indicator gained a full 6.0 percent.

Decelerating auto sales receipts acted as a drag on the headline figure after giving it a bigger boost in June.  This indicator is not adjusted for price changes, so inflation or rising average outlays can mask underlying weakness at times.  July’s tally is an example of this phenomenon.  Cars sold actually declined in the period, but the receipts managed to rise 0.2 percent as the average car price increased.  Stripping cars from the total leaves a solid uptick of 0.6 percent.

Most categories were stronger in the period.  Electronics and appliance stores improved.  Food and beverage sales were higher as well.  Gasoline station receipts (also susceptible to price changes) increased.  Consumers spent more money on clothing items and increased outlays at nonstore retailers.  However, a few notable declines were seen in home furnishings, sporting/hobby stores, and health/personal care stores. 

But wait there’s more!  Once again Atlas’ favorite line item in this report improved, and did so in a big way.  Americans spent 1.3 percent more at food services & drinking places in July.  This uptick helped boost the year-over-year tally to 9.7 percent.  Now that’s food for thought when it comes to the health of our economy.

From the perspective of consumption, America’s output continues improving.  This indicator alone represents about one-fifth of the U.S. economy, so its upward trajectory remains encouraging.  While it will not last forever, this economic expansion is not over.