WORTH THE READ
American Consumers are Spending
August 15, 2023 - 2 MINUTE READ
In the past month, Americans demonstrated a surge in their shopping activities across various sectors, including clothing, dining, and sporting goods, highlighting the continuous strength of consumer expenditure driving the robust U.S. economy.
According to the latest report from the Commerce Department on Tuesday, retail sales experienced a pleasantly surprising increase of 0.7% in July compared to June. This positive momentum followed an adjusted 0.3% rise in the previous month, as reported by the government.
Excluding autos and gas, sales showed a solid 1% increase. Various sectors saw growth: department stores by 0.9%, clothing/accessories stores by 1%, and sporting goods/hobby stores by 1.5%. Restaurants and online sales rose by 1.4% and 1.9% respectively, but furniture/electronics stores struggled.
This growth highlights economic resilience despite high prices and interest rates impacting credit card spending and mortgages. Spending this year has been erratic, surging almost 3% in January, dropping in Feb/March, then recovering.
The report comes as inflation has cooled, but core inflation (excluding food/energy) matched a two-year low, indicating the Federal Reserve's rate hikes have curbed price increases.
On Tuesday, Home Depot, the largest home improvement retailer in the U.S., revealed second-quarter results surpassing profit and sales forecasts. However, sales persisted in their decline, with rising inflation and soaring interest rates increasingly influencing Americans' spending decisions.
We will see if this trend continues for the remainder of 2023, with some retailers starting to offer holiday merchandise like wreaths and other décor online last month. This may seem early to some, but retailers noticed shoppers already searching for holiday items this summer. In case you were curious, Christmas is 132 days away, let the fun begin.