U.S. Sales Flat In July, Commerce Dep't Reports

The pace of sales at US retailers was unchanged last month as persistently high inflation and rising interest rates forced many Americans to spend more cautiously, Paul Wiseman and Anne D’Innocenzio reported for the Associated Press (AP).

Photo Insert: Retail purchases were flat after having risen 0.8% in June.

Retail purchases were flat after having risen 0.8% in June, the Commerce Department reported Wednesday. Economists had expected a slight increase.

Still, Wednesday’s report contained some positive signs: Excluding autos and auto parts, retail sales rose 0.4% in July. Lower gas prices likely freed up money for people to spend elsewhere. Gasoline sales slid 1.8%, reflecting the drop in pump prices.

“As gas prices fell, consumers had more money in their pockets for other items such as furniture and electronics,″ said Jeffrey Roach, chief economist at LPL Financial.

Sales of building supplies and garden equipment held up, as did sales at electronics and appliance stores. At the same time, consumers remained wary of spending much on non-essentials: Sales were down 0.5% at department stores and 0.6% at clothing stores.

Compared with 12 months ago, overall retail sales rose 10.3% in July.

America’s consumers, whose spending accounts for nearly 70% of U.S. economic activity, have remained mostly resilient even with year-over-year inflation near a four-decade high, rising economic uncertainties, and the surging costs of mortgages and borrowing money.

Still, overall spending has weakened, and it has shifted increasingly toward things like groceries, and away from less necessary things like electronics, furniture, and new clothes.

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