Though traditionally a slow month for retail sales, consumer spending soared above analysts expectations in July. According to the National Retail Federation (NRF), July retail sales in the GAFS category (general merchandise stores, clothing and clothing accessories stores, furniture and home furnishings stores, electronics and appliances stores, and sporting goods, hobby, book and music stores) increased 0.8 percent seasonally adjusted from June, and rose 6.0 percent from the same period last year.
Retail sales rose in most categories in July, excluding nonstore retailers such as online and catalog retailers and sporting goods, hobby, book, and music stores.
July retail sales released Tuesday by the U.S. Commerce Department show that total retail sales (which include non-general merchandise categories such as autos, gasoline stations and restaurants) were up 1.4 percent seasonally adjusted for the month. Retail sales rose 6.5 percent unadjusted year-over-year.
“Consumers are returning to the stores and, more importantly, they are buying,” said NRF Chief Economist Rosalind Wells. “Julys retail sales continue to demonstrate that the economy is recovering and that there is definite reason for optimism in the second half of the year.”
Consumers continued investment in their homes spurred growth of building material and garden equipment and supplies dealers, which saw a 1.3 percent adjusted gain month-over-month and an encouraging 8.6 percent increase year-over-year. Electronics and appliances stores also saw high levels of growth in July, rising 1.2 percent adjusted month-over-month and 7.2 percent unadjusted year-over-year.
Retailers, clearing summer merchandise, saw strong sales in the apparel market, with sales at clothing and clothing accessories stores rising 0.8 percent adjusted month-over-month and soaring 6.4 percent unadjusted year-over-year.
“The improved sales momentum reflects a strengthening economy, increased disposable income for consumers resulting from the tax cut, and the positive response of consumers to clearance merchandise,” said NRF Chief Economist Rosalind Wells. “August sales have started strong and back-to-school sales should perform well.”
The National Retail Federation continues to project that GAFS sales will rise 4.3 percent in the third quarter and 4.7 percent in the fourth quarter. NRF is predicting that sales of back-to-school merchandise will be $14.1 billion.