The June US retail sales report is certainly stronger than expected although headline sales on the month were still only flat on the month. The consensus was for a 0.3% month-on-month drop and the May figure was revised up two tenths of a percentage point to 0.3% MoM growth.
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While motor vehicle and gasoline sales fell, all other areas were strong. Non-store (largely internet) saw sales rise 1.9% MoM, building materials jumped 1.4%, clothing and furniture both increased 0.6%. It may be that hot, sticky weather has incentivised households to spend more time in the AC controlled environments of retail stores and shopping malls and that has helped to lift sales somewhat.
Nonetheless, the data reflects nominal US dollar value changes. The chart above shows that real (volume) terms retail sales remain around 4 percentage points below their 2021 peak and it is volume growth that matters for GDP – the advanced second quarter estimate is released next Thursday. Moreover, retail sales as a proportion of total consumer spending is converging on the pre-pandemic trend after having spiked in 2020 and 2021.
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