WASHINGTON—Total retail sales slid 1.1% in July, following June’s upwardly revised rise. Of note, the May number was also upwardly revised to a drop of 1.4 percentage points.
"Retail sales dropped in July, partially attributed to weakening auto sales and the spending between goods and services returning to normal," stated NAFCU Chief Economist and Vice President of Research Curt Long. "Excluding autos, retail sales dropped only 0.4% in July.”
"It is possible that rising COVID cases are beginning to dent consumer sentiment, but the fact that restaurant spending increased during the month suggests that such concerns are modest," added Long. "Retail sales are not adjusted for inflation, and it may be that recent price growth is starting to affect sales volume."
Year-over-year growth in retail sales was up 15.6% during the month, down from 18.6% in January. Control group sales were also up from a year ago, rising 14.2%.
Other Metrics
Results among the major retail segments were generally negative during the month. Motor vehicles and parts dealers dropped 3.9%, followed by nonstore retailers down 3.1%, clothing stores down 2.6%, and building materials down 1.2%. The only gains on the month were gas stations and food services, rising 2.4 and 1.7%, respectively.
"There is also the issue of the ongoing rotation of purchases away from goods and into services, with retail sales only capturing sales of goods," Long concluded. “NAFCU expects overall consumption to remain solid as the job market recovers, though there could be volatility due to overseas supply chain issues.”