July Sales Data: Autos Boost Retail Sales

By SBE Council at 15 August, 2024, 11:53 am

by Raymond J. Keating -

Retail and food services sales bounced back from a 0.2 percent decline in June to grow by 1.0 percent in July, according to the latest report from the U.S. Census Bureau.

July sales received a big boost from autos. Motor vehicle and parts dealer sales jumped by 3.6 percent in July. Sales minus autos increased by 0.4 percent.

With inflation running at 0.2 percent in July, real (i.e., inflation adjusted) sales were positive. However, the same could not be said for the past year. From July 2023 to July 2024, retail and food services sales grew by 2.7 percent. That compared to CPI inflation running at 2.9 percent over the same period. Therefore, real retail and food services over the past year actually declined. (More on this in a moment.)

Compared to the previous month, beyond autos, sales growth was solid in areas like electronics and appliance stores (+1.6 percent); building material & garden eq. & supplies dealers (+0.9 percent); food and beverage stores (0.9 percent); and health & personal care stores (+0.8 percent).

Meanwhile, the largest declines compared to the previous month came in miscellaneous store retailers (-2.5 percent); and sporting goods, hobby, musical instrument, & book stores (-0.7 percent).

In addition, nonstore retailers (mainly online) sales increased by 0.2 percent in July compared to June, which, after inflation, means that sales were flat.

Finally, it's worth taking a look at the trend in retail and food services sales in real dollars.

The chart above shows inflation-adjusted sales growing up to the pandemic, diving as the pandemic hit and the economy shut down, and then a dramatic, quick recovery. However, since April 2022, the unmistakable trend in real sales has been stagnation or a slight decline. That decline can be attributed in part due to inflation, and perhaps in part due to a reining in of spending after that snapback.

Of course, like entrepreneurs and investors, consumers face all kinds of questions and uncertainties looking ahead, from inflation to the possibilities of recession to the election.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His latest books on the economy are The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist, The Weekly Economist II:52 More Quick Reads to Help You Think Like an Economistand The Weekly Economist III: Another 52 Quick Reads to Help You Think Like an Economist.

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