Dive Brief:
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U.S. retail sales rose .6% in July, an indication of a steadier economy and improving job market, according to the monthly retail sales report from the U.S. Commerce Department. The metrics for June remained essentially unchanged, according to the report.
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Much of the improvement was seen in sales of cars and building supplies and spending at restaurants. Retail sales at electronics and department stores slowed, while grocery stores spending was flat.
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Still, economists saw signs of a steadier economy in the July spending numbers that bodes well for the last half of the year.
Dive Insight:
July was a month of healthier spending, a boon to an economy that, despite improvements, has taken a while to show improvements in jobs, wages, and consumer spending. Lower fuel prices, which seemed to make little difference in earlier months, may finally be making a difference in consumer habits.
Of course, it’s a chicken-and-egg proposition in many ways: consumer spending fuels the economy, but wages and jobs must be there to fuel consumer spending. July’s numbers are a sign that of a steadier improvement in those synergies.
“This report looks solid after a run of disappointing numbers,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics, told the Washington Post.
What that means for many retailers, though, isn’t really clear. While July’s numbers showed healthier spending, it wasn’t in consumer goods like electronics or even grocery stores. Consumers’ priorities have shifted, and wages haven’t really caught up, despite a tightening labor market. Finally, whether out of habit or need, shoppers still seem wedded to bargains.
