Sales Figures Almost Unchanged from Prior Month
New York, NY — Retail sales in the U.S. were unchanged in July as consumers reduced spending on clothing and other goods, signaling some slowdown in consumer spending and raising questions over the strength of economic growth in the world’s largest economy.
The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for July were $457.7 billion, practically unchanged from last month and 2.3% above the same month a year prior.
The U.S. Department of Commerce, however, revised upward the sale number for June to 0.8%, from 0.6% reported earlier.
Excluding volatile items such as gasoline, food, and building materials, core retail sales were also unchanged in July after a 0.5% rise in June, the data showed. (Source: “Advance Monthly Sales For Retail And Food Services July 2016,” United States Census Bureau, August 12, 2016.)
Economists surveyed by Reuters had a forecast of 0.4% increase in retail sales and 0.3% for the core sales for last month.
Strong retail sales in the second quarter helped the U.S. economy post a moderate growth and supported the case for the Federal Reserve policymakers to start raising interest rates. Any further sign of economic growth cooling down may further delay the rate-hike cycle. Many economists now predict that the central bank will stay on the sidelines at least until mid-December.
The U.S. Federal Reserve said last month that, “Near-term risks to the economic outlook have diminished,” upgrading its assessment of the U.S. economy and signaling that it may resume its interest rate increases soon.
Nine out of 10 members of the Fed’s policy-making committee voted to leave the benchmark federal funds rate unchanged at between 0.25% and 0.5%, but the statement showed a more upbeat description of the labor market and other sectors of the economy.
“Information received since the Federal Open Market Committee met in June indicates that the labor market strengthened and that economic activity has been expanding at a moderate rate,” the Federal Open Market Committee (FOMC) said after its two-day meeting. “Job gains were strong in June following weak growth in May. On balance, payrolls and other labor market indicators point to some increase in labor utilization in recent months.” (Source: “U.S. Federal Open Market Committee July 27 Statement,” U.S. Federal Reserve, July 27, 2016.)
After the retail sales data, the U.S. dollar fell and Treasuries gained, with the U.S. 10-year yields dropping the most it has in six weeks.
The 10-year note yield fell seven basis points to 1.49%, according to data from Bloomberg Bond Trader. Meanwhile, the U.S dollar was trading. (Source: “Treasuries Gain as Tepid U.S. Data Push Traders to Reprice Fed,” Bloomberg, August 12, 2016.)