Car shortage, change in tank maintenance expenses US retail sales
- Retail sales down 1.1% in July
- Core retail sales are down 1.0%. june revision
- July manufacturing output jumped 1.4%
Washington, Aug. 17 (Reuters) -Retail sales in the United States fell more than expected in July, the third as shortages dragged down car purchases and the economic recovery and stimulus spending declined. At the start of the quarter, he suggested slowing economic growth.
The drop in sales reported by the Commerce Department on Tuesday also reflects the shift in spending on services from goods. Retail sales dominate the merchandise component of consumer spending, which accounts for a small portion and the remainder is made up of bulky services such as health care, travel, and hotel accommodation.
The school year will begin in earnest at the end of August and most school districts will return to face-to-face learning. So while the increase in COVID-19 cases and the drop in consumer confidence this month for the first time in 10 years is a wildcard, consumer spending remains strong and could support economic growth.
“On the contrary, today’s data is catching up at the start of the third quarter after a sharp increase in consumption growth in the second quarter due to the fiscal stimulus,” said Kevin Cummins, chief US economist at NatWest. This suggests that there is none. ”Market in Stamford, Connecticut.
“We expect sales to pick up in the quarter. Spending will benefit from the power of recent job growth and the new semester spending boost as children begin to return to classrooms. “
Retail sales fell 1.1% last month. Data for June has been revised to show a 0.7% increase in retail sales instead of the previously reported 0.6% increase. Retail sales are 17.2% above pre-pandemic levels.
Economists polled by Reuters predicted retail sales would decline 0.3%. Sales increased 15.8% from July last year.
Receipts at car dealerships fell 3.9% after falling 2.2% in June. Auto production has been hampered by a global semiconductor shortage.
Another report from the Federal Reserve Board of Governors on Tuesday shows auto production jumped 11.2% in July, as automakers reduced or canceled annual remodeling suspensions to avoid chip shortages. There was some promising news. It boosted manufacturing output last month. Read more
Online retail sales down 3.1%, return on investment after Amazon.com (AMZN.O) Prime Day has been postponed from July to June. Clothing store sales fell 2.6%. A rebound is expected when parents shop in the new semester. In mid-July, eligible households began receiving money under an extended child tax credit program that runs through December.
Sales at building supply stores fell, as did sporting goods, hobbies, musical instruments and bookstore receipts.
However, consumers increased their spending in restaurants and bars, increasing revenue by 1.7%. Restaurant and bar sales increased 38.4% from July 2020. Restaurants and bars are the only service category in the retail sales report.
Sales at electronics stores increased 0.3%.
The National Retail Federation said July’s drop “did not change the outlook for the record year,” and said consumer credit was in good shape. Labor markets are strengthening, and rising stock prices and house prices increase household wealth.
Wall Street stocks fell after the S&P 500 benchmark (.SPX) And the Dow Jones Industrial Average (.DJI) It closed at record highs on Monday. The dollar appreciated against a basket of currencies. The price of the US Treasury was high.
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Retail sales, excluding auto, gasoline, building materials and foodservice industries, fell 1.0% last month, following a revised upward 1.4% increase in June. These so-called basic retail sales correspond most closely to the personal consumption component of GDP. Previously, it was estimated to have accelerated 1.1% in June.
Spending is shifting from basic commodities to services such as travel and entertainment, with more than 50% of the U.S. population vaccinated against COVID-19.
However, the increase in infections caused by the delta variants of the coronavirus may slow the boom in service spending.
In late July, the U.S. Centers for Disease Control and Prevention urged fully vaccinated Americans to resume wearing masks in indoor public spaces in areas where the virus is rife.
“We have long believed that discretionary services would increase overall consumer spending this year as the economy returns to normal,” said Tim Quinnlan, senior economist at Wells Fargo in Charlotte, North Carolina. “But now, with the resurgence of COVID, those benefits may be even more lukewarm.”
Yet the basis for growth in consumer spending remains strong. Employers are raising wages to fill a record 10.1 million jobs. Households are sitting on surplus savings of at least $ 2.5 trillion accumulated during the pandemic.
Private consumption, which accounts for more than two-thirds of U.S. economic activity, posted double-digit growth in the second quarter, surpassing GDP levels above its peak in fourth quarter 2019.
The economy grew at an annual rate of 6.5% in the second quarter. The expected slowdown in consumer spending could have been offset by strong growth elsewhere. With the latest data, including Treasury reports, the Atlanta federal government has raised its estimate of third-quarter GDP growth from 6.0% to 6.2%.
“If consumer spending slows over the next few months, overall growth could slow down, but not as much,” said Ben Ayers, senior economist at Nationwide in Columbus, Ohio. Declared.
Report by Lucia Mutikani; edited by Nick Zieminski and Andrea Ricci
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