US retail sales grow by less than anticipated in June

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Sharecast News | 18 Jul, 2023

Retail sales volumes in the U.S. grew by less than expected last month.

According to the Department of Commerce, sales increased at a month-on-month clip of 0.2% (consensus: 0.5%) to reach $689.5bn.

However, May's increase was revised up by two tenths of a percentage point to show a gain of 0.5%.

Excluding the volatile category of sales at motor vehicles and parts dealers, then sales rose by 0.2% (consensus: 0.3%).

But here too May's increase was revised up by an offsetting two tenths of a point.

Miscellaneous store retailers, furniture stores and electronics all registered big gains for the month, of 2.0%, 1.4% and 1.1%, respectively.

But the single largest contributor to the total tally for sales came from non-store retailers, or online sales.

On the back of Tuesday's numbers, Kieran Clancy at Pantheon Macroeconomics estimated that real consumer spending grew at a quarterly annualised pace of 1.0% over the three months to June.

That compared to a 4.2% surge in the first quarter.

"The jump in spending at the start of the year was largely due to warmer-than-usual weather and the one-time uplift to social security payments, which temporarily boosted spending above trend," he said.

"The broader picture, however, is that growth in consumers’ spending has weakened significantly since the Fed started hiking rates aggressively; a further downshift lies ahead."

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