The Census Bureau said that retail sales were up 0.2 percent in June, its slowest pace since January. The consensus expectation had been for retail spending levels closer to the 0.6 percent and 0.5 percent paces seen in April and May, respectively. Despite the slower levels of activity in July, the year-over-year pace continues to grow at decent levels, up 4.3 percent over the past 12 months. This was lower than the 4.6 percent pace observed the month before, but faster than the 1.8 percent year-over-year rate observed in January.
Spending on motor vehicles and parts declined 0.3 percent in June, its first decrease in six months. Still, the larger story for autos remains a positive one, with 6.4 percent growth year-over-year. If you were to exclude autos, retail spending would have grown by 0.4 percent for the month and 3.7 percent over the past 12 months. The year-over-year pace for retail spending excluding autos was up from 3.4 percent in May and was the fastest pace in 11 months.
Therefore, the news was perhaps more positive than the top-line figure might suggest. Areas with higher retail spending in the month of July included health and personal care stores (up 0.9 percent); nonstore retailers (up 0.9 percent); clothing and accessory stores (up 0.8 percent); sporting goods, hobby, book and music stores (up 0.6 percent); food and beverage stores (up 0.4 percent) and gasoline stations (up 0.3 percent). Beyond autos, building materials and garden supply stores (down 1.0 percent) and food services and drinking places (down 0.3 percent) also had decreased retail spending for the month.
Chad Moutray is the chief economist, National Association of Manufacturers.