July US retail sales slow amid tight supply chain, but demand on: NRF

“July retail sales showed slight deceleration in spending, but nothing to derail our outlook for a record year,” NRF president and chief executive officer Matthew Shay said in a statement.

“Though the delta variant is presenting health challenges while supply chain disruptions along with unfilled job openings are presenting business challenges, the consumer and broader economy continue to display steady strength aided by advanced tax credit payments and strong gains in the labor market and personal incomes,” he added.

“Despite this monthly dip, the economy has rebounded quite well and is more than just on the mend,” NRF chief economist Jack Kleinhenz said.

“The consumer has continued to be resilient and recent price increases brought on by constraints in the supply chain have not dampened the robust demand seen during the past year. If retailers could find more inventory, they could sell it,” he said.

“Going forward, consumers are a bit fearful again as we approach another possible wave of COVID-19 infections, but they’ve learned to live with the virus and shopping continues. The delta variant could impact local markets, especially where vaccination rates are low, but doesn’t appear likely to show up in the national data,” he said.

Consumer finances are in good shape with a cushion from paying off debt and building up savings, Kleinhenz added.

Employment and wages have seen recent back-to-back increases, and advance child tax credit payments going out for the second month in a row should provide a bump for spending, NRF said. Solid back-to-school spending contributed to July’s results and is expected to spill over into August as well.

The US Census Bureau today said overall retail sales in July were down by 1.1 per cent seasonally adjusted from June but up by 15.8 per cent year over year. That compares with an increase of 0.7 per cent month over month and an increase of 18.7 per cent year over year in June.

Despite occasional month-over-month declines, sales have grown year-over-year every month since June 2020, according to Census data.

For the first seven months of the year, sales as calculated by NRF were up by 15.5 per cent over the same period in 2020. That is consistent with NRF’s revised forecast that 2021 retail sales should grow between 10.5 and 13.5 per cent over 2020 to between $4.44 trillion and $4.56 trillion.

Clothing and clothing accessory stores were down by 2.6 per cent month over month seasonally adjusted but up by 45.8 per cent unadjusted year over year. Furniture and home furnishings stores were down by 0.6 per cent month over month seasonally adjusted but up by 15.6 per cent unadjusted year over year.

ALCHEMPro News Desk (DS)