Summary: Retail sales increases for a third consecutive month; back to pre-pandemic level; majority of category segments increase sales over month; food and drink sales, “gas station” sales the largest influences on month’s total.
US retail sales had been trending up since late 2015 but, commencing in late 2018, a series of weak or negative monthly results led to a drop-off in the annual growth rate which brought the annual rate below 2.0% by the end of that year. Growth rates then increased in trend terms through 2019 and into early 2020 until pandemic restrictions on American households sent it into negative territory.
According to the latest “advance” sales numbers released by the US Census Bureau, total retail sales increased by 1.2% in July. The gain was less than the 1.7% which had been expected and much lower than the 8.4% jump after revisions in June. On an annual basis, the growth rate increased from June’s revised rate of 2.1% to 2.7%.
“The value of retail sales is now above the pre-pandemic level. The rebound in activity has been disproportionately in online sales, while restaurant spending remains lower,” said ANZ economist Hayden Dimes.
The report was released on the same day as the University of Michigan’s August consumer survey and June industrial production figures. US Treasury bond yields moved lower except at the ultra-long end where they increased a little. By the end of the day; the US 2-year Treasury yield had shed 3bps to 0.15%, the 10-year yield had slipped 1bp to 0.71% while the 30-year yield finished 2bps higher at 1.45%.
A majority of segments increased sales over the month, with the “Food services & drinking places” and “Gasoline station” segments providing the largest influences on the overall result. Sales in these segments increased by 5.0% and 6.2% respectively over the month.