July Retail Sales Rebound, Up 3.5 Percent Over 2016

Robyn Valdez
August 17, 2017

The July numbers come as retail continues a long-term pattern of increased sales.

Consumer spending, which accounts for more than two-thirds of USA economic activity, increased at a 2.8 per cent annualised rate in the second quarter.

Retail sales alone increased 4.3% from a year ago, with the largest gain again coming from non-store retailers - primarily by e-commerce and catalog businesses with sales up 11.5% from July 2016.

Sales got a boost in July from a 1.2 percent jump in auto sales, the strongest result since December.

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The weaker dollar ensured U.S. retailers of overseas goods were not importing inflationary pressures, as the import price index rose at a monthly pace of 1.5% in July, the same as June's reading.

Retail sales have climbed 4.2% in the past 12 months, close to the five-year average.

Retail sales for June and May also were revised higher, which should help to assuage concerns about consumer spending, But persistently sluggish wage growth has pushed Americans to dip into their savings to fund spending. Not only did the July numbers comfortably beat expectations but the June numbers were also revised higher, providing an additional boost for dollar bulls. "We have yet to see the full effect of back-to-school spending, but pickup in spending was evident both online and in general merchandise, which includes bricks-and-mortar department stores".

Nonstore Retailers were up 11.5% from July 2016, while Building Materials and Garden Equipment and Supplies Dealers were up 8.3% from past year. Contributing $2.6 trillion to annual GDP, retail is a daily barometer for the nation's economy.

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It earlier touched its highest level since July 26.

Sales at electronic stores also fell slightly, but in all likelihood consumers merely shifted purchases to online retailers such as Amazon.

Excluding cars, retail sales still rose 0.5 per cent, while leaving out the volatile gasoline segment, sales were up 0.7 per cent. Sales at clothing stores fell 0.2 per cent after rising 0.7 per cent in June.

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