Retail sales slightly increased by 0.2% for June (seasonally adjusted) compared to May. However, these numbers do not include adjustments for price changes. The Consumer Price Index (CPI) also rose 0.2% in June versus May, seasonally adjusted. Categories that did well compared to last month were non-store sales, up 1.9%; furniture sales, up 1.4%; and electronics/appliance stores, up 1.1%. Department stores showed the most significant sales decrease, dropping 2.4%. Total sales for April 2023 through June 2023 were up 1.6% from the same period a year ago.
Leading indicators for a solid second half of year
Consumer spending was up 9% in June, according to data from Affinity Solutions. “Consumers still have accumulated savings, and they are continuing to spend,” said Jonathan Silver, CEO and founder of Affinity Solutions, which tracks over 8.8 billion customer transactions across 4200 brands representing $500 billion in annual spending. During the pandemic, the U.S. government firehosed about $5 trillion into the economy. By the end of August 2021, accumulated excess savings totaled around $2.1 trillion. As of March 2023, there is still an estimated $500 billion of excess savings. “The inflation numbers were less than what economists anticipated at 3% (for the rolling 12 months ending June); the lower unemployment rate of 3.6% and the positive wage growth will help with consumer spending in the year’s second half. People will not have to dip into their accumulated savings, which is a leading indicator of continued consumer spending,” said Silver.
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