Unstable retail activity in July as falling fuel prices held back sales at gas stations and consumers turned to shopping more online, the Census Bureau said on Wednesday.
While pre-retail sales were flat, total sales excluding autos rose 0.4%. Economists surveyed by Dow Jones looked for a 0.1% increase in the top and total vehicle shipments flat. June’s gain was revised from 1% to 0.8%.
Retail and food sales excluding gasoline and autos rose 0.7% from a month ago.
These numbers are seasonally adjusted but not for inflation, and come in a month when the consumer price index is flat.
The drop in fuel prices to record highs has pushed down pump station sales, with gas station revenue down 1.8%. Dealers’ sales of motor vehicles and parts also fell sharply, down 1.6 percent.
According to AAA, gasoline prices spiked $5/gallon at many locations early in the summer, but fell in July and most recently $3.94/gallon for conventional unleaded.
Ian Shepherdson, chief economist at Pantheon Macroeconomics, writes: “People seem to have used some of the savings from the drop in gas prices to spend more on other items, both nominal and – very possible – fact”. “Automobile sales are severely limited by chip shortages, so pent-up demand could be substantial. Other losers in July were department stores and clothing retailers. , but all these components are noisy and must be modified.”
That drop in gasoline and auto sales was offset by a 2.7% increase in online sales and a 1.5% increase in miscellaneous sales.
Consumers have struggled to keep pace with an inflationary environment that has seen prices rise 8.5% from a year ago, close to a 40-year high. Rising prices are especially dangerous for food and energy groups; even as energy prices fell in July, revenue from gas stations was up 39.9% from a year ago.
July offers some respite from inflationary pressures, and the drop in fuel costs specifically allows consumers to spend elsewhere.
However, food sales rose only 0.2 percent, even as the food price index measured by the Bureau of Labor Statistics rose 1.1 percent for the month. Sales at bars and restaurants also struggled, up just 0.1%.
Some retailers are also struggling in the current environment.
Target on wednesday said its income fell nearly 90% from a year ago because it had to cut prices on unwanted inventory.
The Federal Reserve has been using interest rate hikes to keep inflation in check. The central bank issued consecutive 0.75 percentage point increases in June and July and is expected to keep moving rates higher until inflation falls to its 2% target level. of the Fed.
