The US Census Bureau’s monthly retail sales report gives economists and Wall Street analysts the latest information on consumer spending. The highly anticipated report collects store and merchant data for all in-store, internet and catalog sales.
In July, retail sales were reported at $ 617.7 billion, the lowest level of monthly sales since February. Total sales were down 1.1% from June. Of the 13 retail sectors in the economy, nine (69%) reported a decline in monthly sales in July. The worst performing sector was motor vehicle and parts dealers, where sales fell 3.9% from the previous month. The other largest declines were in non-store retailers (-3.1%), which are primarily online retailers like Amazon, and clothing and clothing accessories stores (-2.6%).
Despite the July setback, Wall Street is waving no red flag on the state of consumer spending. Retail sales are still 17.5% above pre-February 2020 pandemic levels. For more than a year, massive government spending and generous benefits fueled consumer spending due to the related challenges. to COVID. Flushed by free government money, American consumers have indulged in a torrential spending spree.
But Wall Street knows that the accelerated pace of consumer spending is not sustainable. On September 6, the federal supplemental unemployment benefit program, which includes the additional $ 300 per week in unemployment benefits, is due to expire. In the past two months, about 25 states – including Iowa – have already pulled out of the federal program, arguing that it dissuades employees from returning to work.