US Retail Sales Take Downturn in July

RAPAPORT... US retail sales slipped in July amid supply-chain disruptions and a shift in spending from goods to activities, the National Retail Federation (NRF) said Tuesday.Revenue fell 1.1% from the previous month, according to data it cited from the US Census Bureau. For comparison, June saw a gain of 0.7% over May. While July sales increased 16% year on year, the rise was primarily due to a favorable comparison with the same period of 2020, when many stores were closed due to the coronavirus pandemic.Retailers have been dealing with continued jams in the supply chain - first because of Covid-19, and then due to port congestion amid high demand. Consumers' desire to return to activities such as dining out and travel have also dented sales."The shift to spending on services was expected as more of the economy reopened, and this year's move of the Amazon Prime Day promotion to June may have siphoned off some sales that normally come in July," the NRF explained.However, the federation does not believe the drop is an indication of an overall slowdown in retail purchasing."Despite this monthly dip, the economy has rebounded quite well and is more than just on the mend," asserted NRF chief economist Jack Kleinhenz. "The consumer has continued to be resilient, and recent price increases brought on by constraints in the supply chain have not dampened the robust demand seen during the past year. If retailers could find more inventory, they could sell it."Sales in July were lower than the previous month in all but two of the nine categories the US Census Bureau monitors. The clothing and accessories segment - which includes jewelry - was down 2.6%. For the first seven months of the year, sales were up 16% compared to the same period of 2020, in line with the NRF's forecast that retail sales would grow 10.5% to 13.5% this year to between $4.44 trillion and $4.56 trillion. "July retail sales showed slight deceleration in spending, but nothing to derail our outlook for a record year," said NRF CEO Matthew Shay. "We remain optimistic that the strength of the American consumer and ingenuity of the retail industry will produce continued growth heading into the fall."Image: Shoppers at a mall. (Shutterstock)