U.S. Retail Sales Growth Misses Estimates Amid Pullback In Auto Sales
With a pullback in auto sales partly offsetting strength in other areas, the Commerce Department released a report on Friday showing U.S. retail sales increased by less than expected in the month of July.
The Commerce Department said retail sales advanced by 1.2 percent in July after soaring by an upwardly revised 8.4 percent in June.
Economists had expected retail sales to jump by 1.9 percent compared to the 7.5 percent spike originally reported for the previous month.
“The more modest 1.2% gain in headline retail sales highlights that the consumer recovery slowed in July, but that is not a huge disappointment given that sales are now back above pre-pandemic levels,” said Michael Pearce, Senior U.S. Economist at Capital Economics.
He added, “Even allowing for much weaker gains in consumption in July, August, and September, the rebound already seen means that would still translate into a 30% annualized rebound in third-quarter consumption.”
The weaker than expected retail sales growth came as sales by motor vehicle and parts dealers slumped by 1.2 percent in July after leaping by 9.1 percent in June.
Excluding auto sales, retail sales surged up by 1.9 percent in July after spiking by 8.3 percent in June. Ex-auto sales were expected to increase by 1.3 percent.
Sales by electronics and appliances stores helped lead the bigger than expected jump in ex-auto sales, skyrocketing by 22.9 percent.
Miscellaneous store retailers, gas stations, clothing and accessories stores and food services and drinking places also saw notable sales growth.
Core retail sales, which exclude automobiles, gasoline, building materials and food services, surged up by 1.4 percent in July after spiking by 6.0 percent in June.
Reflecting the rebound in sales over the past few months, total retail sales in July were up by 2.7 percent compared to the same month a year ago.
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