Retail sales recovery continues in July

NRF chief economist says retail sales are starting the third quarter on solid footing.

Retail sales continued to recover from the impact of the COVID-19 pandemic in July. The U.S. Census Bureau reports that overall retail sales during July were up 1.2 percent seasonally adjusted from June and up 2.7 percent year-over-year. That follows an 8.4 percent month-over-month increase in June. Retail sales have been climbing after a record monthly drop while most stores were closed in April.

“Retail sales for July were another positive step in the right direction as our economy continues to slowly reopen,” National Retail Federation President and CEO Matthew Shay says. “Americans are showing their continued resilience and willingness to spend in the face of this unprecedented pandemic and government actions to date have clearly supported consumers and the economy in this process. Retailers all across the country have demonstrated that their stores and supply chains can be operated safely and effectively for associates and their customers by following established guidelines and protocols.”

The NRF’s calculation of retail sales – which excludes automobile dealers, gasoline stations and restaurants in order to focus on core retail – showed July was up 1 percent seasonally adjusted from June and up 10 percent unadjusted year-over-year. NRF’s results are different from the Census Bureau’s figures because of the categories excluded by NRF.

The July numbers were part of a strong trend, notes NRF: Its figures were up 7.1 percent unadjusted year-over-year on a three-month moving average and up 4.7 percent for the first seven months of the year. Just over half of retail categories saw month-over-month gains and three-quarters saw year-over-year increases.

“Retail sales are starting the third quarter on a solid footing considering the nosedive we saw this spring, but we have to remember that there’s uncertainty about economic policy and that the resurgence of the virus is putting pressure on the fledgling recovery,” NRF Chief Economist Jack Kleinhenz said. “While households are spending, they are anxious about their health and economic well-being, so they are being pragmatic. The amount of uncertainty about forecasting is huge as we look toward the second half of the year, and what happens with the economy comes down to what the coronavirus allows us to do.”

Specifics from key retail sectors during July include:

Clothing and clothing accessory stores were up 5.7 percent month-over-month seasonally adjusted but down 19.6 percent unadjusted year-over-year.
Health and personal care stores were up 3.6 percent month-over-month seasonally adjusted and up 3.1 percent unadjusted year-over-year.
Online and other non-store sales were up 0.7 percent month-over-month seasonally adjusted and up 25.8 percent unadjusted year-over-year.
Furniture and home furnishings stores were unchanged percent month-over-month seasonally adjusted but up 0.5 percent unadjusted year-over-year.
General merchandise stores were down 0.2 percent month-over-month seasonally adjusted but up 3.1 percent unadjusted year-over-year.
Building materials and garden supply stores were down 2.9 percent month-over-month seasonally adjusted but up 16 percent unadjusted year-over-year.
Sporting goods stores were down 5 percent month-over-month seasonally adjusted but up 18.9 percent unadjusted year-over-year.