Retail sales rise less than expected in June as spending cools
Retail sales cool in June as consumer spending barely rises
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Americans pulled back on spending at retail stores in June, even as inflation showed welcome signs of slowing down.
Retail sales, a measure of how much consumers spent on a number of everyday goods, including cars, food and gasoline, rose just 0.2% in June, the Commerce Department said Tuesday. That is below both the 0.5% increase projected by Refinitiv economists and the 0.5% gain recorded in May.
Excluding the more volatile measurements of gasoline and autos, sales climbed 0.3% last month.
The figures are not adjusted for inflation.
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A pedestrian carries Nespresso shopping bags in San Francisco on Dec. 21, 2022. (David Paul Morris/Bloomberg via Getty Images / Getty Images)
"While positive, the numbers were weaker than expected and show growing consumer caution," said Robert Frick, corporate economist at Navy Federal Credit Union. "Overall, Americans have the money to spend with more jobs, higher wages and lower inflation. But given slowing spending and higher savings, they’re choosing to be prudent, perhaps because a majority see unemployment rising later this year."
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Consumers spent more on items like cars, furniture and electronics and appliance stores. They also continued to open their wallets when online shopping, with spending at non-store retailers jumping 1.9% from the previous month.
Sales rose in seven of 13 retail categories last month.
At the same time, Americans pulled back on spending in areas like grocery stores, garden and home improvement outlets, specialty hobby retailers like sporting goods, and musical instrument and bookstores. Gas sales slid 1.4% in June, even as the cost of fuel jumped.
People shop at a UNIQLO store during the grand opening of the Hudson Yards development in New York City on March 15, 2019. (Reuters / Reuters Photos)
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A solid job market and big wage increases have helped to buoy consumer spending in recent months, despite record-high inflation. However, the softer-than-expected data is the latest sign that consumers are growing more cautious.
"The current picture on the consumer is a bit blurry," said Jeffrey Roach, chief economist at LPL Financial. "It seems that excess savings buoyed retail activity in recent months, but consumers are quickly depleting those excess reserves and starting to use credit to support spending habits."