Consumers Still Spending, Just Differently

Census Bureau reports retail sales growth in June

By Alan Wolf, YSN

The U.S. Census Bureau has confirmed a previous report that consumers looked past soaring inflation last month to continue spending in stores.

According to the agency’s retail sales tally for June, overall sales rose 0.6% from May and increased 5.8% percent year over year, excluding auto dealers, gas stations and restaurants.

Online retailers and home improvement chains led the charge, with year-over-year gains of 9.6% and 6.7%, respectively, the Census Bureau said.

By comparison, sales at furniture and home furnishings stores were up 1.4% month over month seasonally adjusted and up 4.8% unadjusted year over year, while electronics and appliance sell-through was essentially flat from May and down 8.7 percent unadjusted year over year, the Bureau reported.

According to the National Retail Federation (NRF), the figures reflect the fact that consumers are adjusting their budgets and prioritizing essential items like food, energy and back-to-school products. “Inflation has consumers modifying their spending behavior,” said Matthew Shay, president/CEO of the retail trade association.

Moreover, while consumers are “powering through price pressures,” rising costs are creating financial insecurity for many, said NRF Chief Economist Jack Kleinhenz.

“Inflation is eating away at savings built up during the pandemic and is wiping out recent income gains,” Kleinhenz said. “Inflation remains a challenge to consumers trying to make ends meet and will continue to be an issue even if it cools down in the months ahead.

“Despite that,” he added, “consumers are holding up notably well and continuing to spend.”

The NRF is calling on the federal government to impose policy measures like removing China tariffs, enacting smart immigration reforms and investing in supply chain resiliency to lower costs for American families “and put much-needed dollars back into their pockets,” Shay said.

BrandSource, a unit of YSN publisher AVB Inc., is a nationwide buying group for independent appliance, furniture, mattress and CE dealers.