{"id":76871,"date":"2025-08-17T17:50:23","date_gmt":"2025-08-17T17:50:23","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/76871\/"},"modified":"2025-08-17T17:50:23","modified_gmt":"2025-08-17T17:50:23","slug":"my-thoughts-about-those-july-retail-sales","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/76871\/","title":{"rendered":"My Thoughts about those July Retail Sales"},"content":{"rendered":"

\t\t Drunken Sailors going about their lives, spending money, moving the economy forward.
\nBy\u00a0Wolf Richter<\/a>\u00a0for\u00a0WOLF STREET<\/a>.<\/p>\n

Retail sales rose 0.5% in July from June, and June\u2019s growth was revised up to 0.9%, seasonally adjusted. That\u2019s solid growth.<\/p>\n

But retail sales have gone through some gyrations so far this year, month-to-month: In January, they plunged from December, in February they were up just a hair, in March they spiked, in April they dipped, in May they plunged, in June they spiked (as revised higher today), and in July, they increased solidly.<\/p>\n

These gyrations this year were caused by massive sales at auto dealers in March, due to tariff front-running and a strong tax-refund season (down payments). Auto dealers are the largest category of retailers (19% of total retail sales), and they move the needle. Then, auto sales backed off from that spike, which caused month-to-month retail sales to sag in April and May. And in June and July, consumers reverted to the solid-growth trend.<\/p>\n

Year-over-year, retail sales in July rose 3.9% seasonally adjusted. And not seasonally adjusted, they rose 4.3% to $744 billion, according to the Census Bureau today.<\/p>\n

The three-month average (red in the chart below) irons out those gyrations. For July, it includes the big drop in May, and still rose by 0.2%. Year-over-year it was up 3.9%. This is solid growth.<\/p>\n

Inflation plays only a small role in retail sales because inflation in goods that retailers sell has been relatively subdued this year. Inflation is in services which dominate consumer spending, but services are not part of retail sales. Prices of some goods categories are down year-over-year, others are up.<\/p>\n

The CPI for durable goods (motor vehicles, consumer electronics, furniture, appliances, sporting goods, etc.) rose 1.2% year-over-year.\u00a0The CPI for nondurable goods (food, gasoline, apparel, shoes, household supplies, etc.) is up only 0.5% year-over-year (details and many charts here<\/a>).<\/p>\n

The three-month average shows the solid relatively steady growth. There is nothing wrong with US consumers. They\u2019re just fine; employment is at a record, they\u2019re making more in wages and salaries than ever before; unemployment is historically low, layoffs are low, asset markets are soaring, and the $4.6 trillion that households have in money market funds<\/a> are still earning around 4% in interest. So there isn\u2019t really anything surprising about consumers continuing to spend money at a solid pace at retailers.<\/p>\n

\"\"<\/p>\n

Sales at auto & other motor vehicle dealers \u2013 new & used vehicles, RVs, motorcycles, ATVs, snowmobiles, etc. \u2013 jumped 1.7% in July from June to $128 billion, seasonally adjusted, and were up 4.9% year-over-year. Note the gyrations of the month-to-month sales this year (blue line in the chart below).<\/p>\n

This does not include parts dealers. With sales at parts dealers included ($11 billion), sales at Motor Vehicle and Parts Dealers rose 1.6% for the month and 4.7% year-over-year, to $139 billion, accounting for 19% of total retail sales.<\/p>\n

The\u00a0three-month average (red) irons out only part of those gyrations:<\/p>\n

\"\"<\/p>\n

Ecommerce\u00a0(#2 retailer category, 17% of total retail) has been growing at a strong pace and continued to do so in July, up by 0.8% from June, seasonally adjusted, and up by 8.0% year-over-year, to $127 billion.<\/p>\n

Three-month average sales: +0.8% month-to-month and +7.0% year-over-year.<\/p>\n

No sign of consumer weakness here, just growing at a relentlessly strong pace, as more and more of the retail trade shifts to ecommerce from brick-and-mortar stores:<\/p>\n

\"\"<\/p>\n

In restaurants and bars\u00a0(#3 category, 13% of total retail), sales dipped by 0.4% month-to-month, from the record in the prior month, to $98 billion, and were up 6.6% year-over-year.<\/p>\n

Three-month average sales: +0.01% month-to-month and +6.1% year-over-year.<\/p>\n

\"\"<\/p>\n

At food and beverage stores\u00a0(#4 category, 12% of total retail), sales rose by 0.5% month-to-month to $85 billion, and by 2.5% year-over-year.<\/p>\n

The three-month average sales: +0.3% month-to-month and +2.4% year-over-year.<\/p>\n

More and more grocery sales have wandered off from grocery stores in this category to general merchandise stores, such as Walmart and Costco (see \u201cgeneral merchandise stores\u201d below) and to ecommerce (see \u201cnonstore retailers\u201d above).<\/p>\n

Food purchases have also wandered off to restaurants, a trend that has been playing out for decades as our Drunken Sailors, as we\u2019ve come to call them lovingly and facetiously, have turned eating into an outside-the-home event (see \u201crestaurants and bars\u201d above).<\/p>\n

\"\"<\/p>\n

At general merchandise stores\u00a0(#5 category, 11% of total retail), sales rose by 0.4% month-to-month to $77 billion, and by 2.3% year-over-year.<\/p>\n

Three-month average sales: +0.3% month-to-month and +2.4% year-over-year.<\/p>\n

Walmart is the largest grocer in the US, and its grocery sales are included here. But its huge ecommerce operations are included in \u201cnonstore sales\u201d above:<\/p>\n

\"\"<\/p>\n

At gas stations\u00a0(#6 category, 7% of total retail), sales move in near-lockstep with the price of gasoline. The price of gasoline started plunging in mid-2022 and then continued to zigzag lower. And gasoline sales in dollar terms have followed the price down.<\/p>\n

The three-month CPI for gasoline plunged by 1.2% in July and by 9.9% year-over-year (dotted purple).<\/p>\n

Three-month average sale: +0.2% month-to-month and +3.9% year-over-year, to $51 billion (red).<\/p>\n

\"\"<\/p>\n

At building materials, garden supply and equipment stores\u00a0(#7 category, 6% of total retail), three-month average sales: -0.8% month-to-month and -1.3% year-over-year to $40 billion.<\/p>\n

\"\"<\/p>\n

At health and personal care stores\u00a0(#8 category, 5% of total retail), three-month average sales: +0.7% month-to-month, and +7.9% year-over-year to $39 billion.<\/p>\n

\"\"<\/p>\n

At clothing and accessory\u00a0stores\u00a0(#9 category, 4% of total retail), three-month average sales: +0.8% month-to-month and +4.5% year-over-year, to $26 billion.<\/p>\n

\"\"<\/p>\n

Our Drunken Sailors are out there spending, even if they\u2019re in a sour mood. And why shouldn\u2019t they? Employment is high, wages are rising<\/a>, and their credit is in good shape except for student loans that suddenly count again as delinquent<\/a>. They\u2019re sitting on trillions of dollars in interest-earning cash<\/a>, and asset prices have soared, and unless something big changes, they\u2019re going about their lives and moving the economy forward.<\/p>\n

Enjoy reading WOLF STREET and want to support it? You can donate. I appreciate it immensely. Click on the mug to find out how:<\/p>\n

\n\"\"<\/a>\n<\/p>\n

\"\"<\/p>\n

WOLF STREET FEATURE: Daily Market Insights by Chris Vermeulen, Chief Investment Officer, TheTechnicalTraders.com<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"Drunken Sailors going about their lives, spending money, moving the economy forward. By\u00a0Wolf Richter\u00a0for\u00a0WOLF STREET. Retail sales rose…\n","protected":false},"author":2,"featured_media":76872,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[45,49,48,46],"class_list":["post-76871","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-ca","tag-canada","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/76871","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=76871"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/76871\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/76872"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=76871"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=76871"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=76871"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}