Consumer Behavior

Retail sales up despite cooling economy

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July 27, 2023

Retail sales continued an upward trend in June despite slower job gains and a cooling economy.

The U.S. Census Bureau reported retail sales in June were up 0.2% from May and up 1.5% year over year. In May, sales were up 0.5% month over month and up 2% year over year.

The results, according to the National Retail Federation, indicate that consumers "remain on solid footing and are spending on household priorities," according to a NRF press release.

"The pace of spending is slower, but consumers are still in control of the direction of the economy thanks to the still-growing labor market and a comfortable cushion of savings," NRF Chief Economist Jack Kleinhenz said in the release. "Jobs aren't growing as fast as they were, but employment is by no means in a slump, and if consumers have jobs, they have the willingness to spend. On average, consumer balance sheets remain sturdy and they have the wherewithal to support spending for most of the rest of the year. That's thanks, in part, to excess savings built up during the pandemic along with easing inflation."

NRF's calculation of retail sales — which excludes automobile dealers, gasoline stations and restaurants to focus on core retail — showed June was up 0.4% from May and up 3.3% unadjusted year over year.