US retail sales fall amid inflation, shifting to service spending | Business and economic news

The U.S. Department of Commerce reported a 1.1% drop in retail sales in July as concerns over delta variants of the coronavirus curtailed spending.

U.S. retail sales fell in July as U.S. consumers stayed home as U.S. consumers shifted spending to restaurants, bars, and gas stations, and coronavirus delta variants surged in parts of the country. ..

According to US Department of Commerce data, retail sales in July were down 1.1% compared to June. Indicated on Tuesday. June retail sales were revised up 0.7%.

According to the data, retail sales fell 1.5% from June, but still increased 13.3% compared to last year.

As a sign of continued US economic recovery from the worst days of the coronavirus pandemic, garment and garment accessory stores increased by 43.4% from this time in 2020, and restaurants and bars increased by 38.4% compared to last year. Has increased.

Automobile and parts dealer sales fell 2.2% in June and then 3.9% in July. This was squeezed by inventory limits and rising prices.

The warm summer weather in the United States also affected e-commerce, down 3.1% in July, a significant slowdown from the previous month.

Falling retail sales indicate that consumers are more cautious about where and how to open their wallets, and concerns about rising inflation may also curb spending.

Goldman Sachs analyst Jan Hatzius said, “Details in the retail sales report show that consumption is fast in the second quarter, but with the easing of disposable income and the advent of the Delta variant in the third quarter. It suggests a lot of resistance. ” Watch out for Tuesday mornings.

The Dow Jones and S & P 500 fell from record highs on Wall Street following weaker earnings reports from major retailers The Home Depot and Wal-Mart.

Home Depot’s share fell 4.6% after a slump in US same-store sales for the first time in two years. This dip was a sign of a chilling home renovation boom. This peaked during a pandemic during a few months of blockade as Americans devoted themselves to a do-it-yourself home renovation project.

Home Depot’s slumping earnings report also dropped shares in its small rival Lowe by 4.4%.

Wal-Mart’s share of the world’s top retailer also fell 0.3%, even after raising its annual forecast for same-store sales in the United States. But just because Americans aren’t spending money in retail stores doesn’t mean they aren’t, analysts say.

“Retail sales reports are usually a reliable indicator of consumer health, but they are incomplete due to consumers’ significant rotation of spending to services,” said Lydia Busur, a US economist at Oxford Economics. We continue to show the big picture. ” Tuesday.

The S & P 500 and the Dow closed at record highs on Monday. Investors continue to balance strong economic recovery optimism with concerns about the resurgence of COVID-19 cases.

US retail sales fall amid inflation, shifting to service spending | Business and economic news

Source link US retail sales fall amid inflation, shifting to service spending | Business and economic news

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